Tony Pitt’s 360 Capital Group has won investor backing to finally take control of the Australian Industrial REIT (ANI) in a move that will create a near $1 billion industrial property vehicle.
The 360 Capital Industrial Fund (TIX) is understood to have gained ownership of 73 per cent of the ANI share register as its revised offer closed yesterday.
TIX held 36 per cent of ANI shares on Friday and will now extend the offer for a further two weeks.
“We welcome ANI unit holders and I look forward to creating a $1 billion industrial fund. We look forward to managing the vehicle for all unit holders,” Mr Pitt told The Australian. “We’ll be more active in the direct market.”
But further corporate activity could first be on the agenda for 360 Capital, with its total return fund yesterday announcing it had boosted its stake in the Industria REIT to 9.8 per cent.
TIX, advised by Moelis & Co, and ANI are now on track to merge and be managed by 360 Capital Group, with a unitholder meeting to be held to remove Fife Funds as manager of ANI.
The independent directors of Fife Funds on Friday night recommended that shareholders take Mr Pitt’s mostly scrip offer, which was sweetened a month ago, putting an end to the vitriolic 10-month tussle.
The revised offer comprised 0.88 per cent of TIX scrip and 24.5c in cash. Based on the TIX share price at the end of last week, this was worth more than $2.41, compared to ANI’s closing investors on Friday of $2.38. Fife Funds spent much of Friday trying to entice a rival South African consortium, comprised of The Pivotal Fund and Redefine, into tabling a takeover bid for the fund.
The independent directors, advised by UBS and Fort Street Adviser, claimed that the all-cash offer of $2.40 a share would have been safer for investors. That deal fell over because the SA consortium would not agree to wave a condition that it would only agree to take the vehicle over if it won at least 50.1 per cent of the register.
360 Capital made its first play for the control of ANI last December. It failed to remove Fife Funds as the manager in May, when 59 per cent of voting units chose to stay with the incumbent manager.
Mr Pitt’s offer increased progressively through the 10-month campaign, with the last sweetener a response to the all-cash offer from the SA consortium. A key moment was last Wednesday, when independent expert KPMG recommended that shareholders accept Mr Pitt’s offer.
None of the Fife Funds directors accepted the offer, including Mr Fife, and instead may sell on the open market.
This article first appeared in The Australian Business Review.