- Investors in the AMP Capital Diversified Property Fund (ADPF) today voted to merge with Dexus’ (DXS) Wholesale Property Fund (DWPF)
- AMP Capital Funds Management received the unsolicited merger proposal from DWPF last year
- AMP Capital also provided an alternative proposal for consideration by ADPF unitholders, however, the independent board committee recommended the DWPF proposal
- The property management for ADPF’s fully-owned industrial properties, as well as fund and support services, will be transitioned over the next few months
- In support of the merger Dexus has agreed to contribute funding to facilitate liquidity for ADPF investors and protect DWPF from value dilution resulting from transaction costs
Investors in the AMP Capital Diversified Property Fund (ADPF) today voted to merge with Dexus’ (DXS) Wholesale Property Fund (DWPF).
AMP Capital Funds Management Limited received the unsolicited merger proposal from DWPF last year and established an independent board committee (IBC) to assess the proposal.
AMP Capital also provided an alternative proposal for consideration by ADPF unitholders, however, the IBC recommended the DWPF proposal.
ADPF is currently a roughly $5.4 billion high-quality diversified property fund that invests in the office, retail and industrial sectors, which was ranked the best performing fund in the MSCI/Mercer index over the two-year period to March 31, 2021.
“While AMP Capital submitted a compelling alternate proposal with significant capital support, we respect our investors’ decision to seek the scale that the merged fund will provide,” AMP Capital head of real estate Kylie O’Connor said.
Following the vote, AMP Capital Funds Management will cease to act as the responsible entity for ADPF, and a transition for unitholders will commence.
The property management for ADPF’s fully-owned industrial properties, as well as fund and support services, will be transitioned over the next few months.
“We are pleased that both sets of unitholders have signalled their confidence in our abilities through their support of the merger proposal and welcome the ADPF unitholders onto our platform,” Dexus CEO Darren Steinberg said.
“We will continue to execute on the fund’s investment strategy as we integrate the ADPF assets to drive performance and deliver further economies of scale from a management, procurement and leasing perspective,” he added.
“The merger will expand Dexus’s funds management business, further diversifying DWPF’s portfolio and investor base while solidifying the fund’s position as a globally significant diversified real estate wholesale fund,” he concluded.
In support of the merger Dexus has agreed to contribute funding to facilitate liquidity for ADPF investors and protect DWPF from value dilution resulting from transaction costs.
Dexus will contribute around $400 million of upfront liquidity to redeeming ADPF unitholders and roughly $50 million of transaction costs for both ADPF and DWPF.
On the market today, Dexus is down 1.44 per cent and is trading at $9.91 per share at 4:41pm AEST.