The Charter Hall Group is poised to again shake up the property sector after teaming with its listed long leased property fund to swoop on a 10 per cent stake in the Viva Energy REIT.
The aggressive funds manager is now in a position to make a play for the management of the of the fund as part of its plans to expand its listed empire.
The manager is owned by the separately listed Viva Energy Group and it would likely be valued on a proportion of the value of its $2.7bn portfolio of petrol stations.
Viva would have little incentive to retain the management company as it has sold its stake in the real estate trust.
Charter Hall could also marshal its existing funds for a takeover play for the entire trust, although this appears less likely as it could have mopped up more of the $734m-plus parcel offloaded by Viva on Thursday night.
Charter Hall partially funded its latest move by selling its 17.5 per cent stake in the BP Partnership, that has a 49 per cent interest in 225 BP service stations, to another listed satellite the Charter Hall Retail REIT.
That fund in turn raised $90m via JPMorgan and UBS.
Whichever course it takes, Charter Hall must manage conflicts of interest between its funds, with at least two already owning slices in petrol stations.
Charter Hall signalled its interest in expanding into petrol stations and last year when the company and its funds outlaid $840m on the interest in the BP sites.
The sale of the stake in Viva Energy REIT was foreshadowed by DataRoom last week.
The group is the country’ largest listed landlord owning solely service station properties and has a national network of 469 servos and convenience retail properties underpinned by 2.2 million sq m of land. The investment portfolio is worth $2.65bn.
The trade was executed by investment banks Bank of America and UBS. Charter Hall and the Charter Hall Long WALE REIT each acquired a 5 per cent stake, for $2.66 per share.
This totalled $103.5m for each 5 per cent stake, and the remaining 25.5 per cent stake was offloaded to funds managers.
These shares, worth at least $527m, were being sold at a floor price of $2.66 each and the final price will be determined via a book build.
The floor price was a 3.6 per cent discount to the last close of $2.76 per share on February 20. Bids were being accepted in 2c increments with the top of the price range being $2.80. On Thursday night the book was covered at the bottom of the range.
“This strategic divestment represents an important transaction for Viva Energy shareholders, releasing capital and enabling us to undertake future capital management initiatives,” Viva chief executive Scott Wyatt said.
He said the real estate trust “remains an important partner of Viva Energy, and we look forward to continuing our strategic relationship into the future”.
But the highly-acquisitive Charter Hall will have significant sway over the future of listed landlord.
Extracted from The Australian