Abacus announced this week that it was undertaking a fully underwritten institutional placement of $250m and a security purchase plan of $25m to pursue in excess of $710 million of value-accretive opportunities, including it's tilt at AOF.
Abacus & Charter Hall currently hold 19.9% of AOF units and have submitted a non-binding indicative best and final proposal to acquire the remaining units in AOF for a cash consideration of $3.04 per unit via a trust scheme of arrangement. Abacus and Charter Hall have been invited to undertake formal due diligence on the fund. If the bid is successful, Abacus’ incremental capital commitment is approximately $308m, and most the fresh capital will be directed toward this acquisition.
To ensure that the capital raising was successful, given the uncertainty that still exists with respect to AOF, Abacus have also identified other capital investment opportunities which would also require additional capital, including in its Self Storage portfolio, as well as other office investments in Richmond and the Sydney CBD.
As part of the announcement, Abacus also provided an update on its FY19 earnings, reporting an unaudited underlying Profit of 24.0 cents per security, Funds From Operations of 22.2 cents per security and declared distribution of 18.5 cents per security (growth of 2.8% on FY18).
Abacus also announced that the preliminary revaluation of its investment portfolio as at 30 June 2019 resulted in an increase of c.$70 million for the 12 months to 30 June 2019 valuing at approximately $2.3 billion. As a result of these valuations, Abacus’ unaudited NTA per security is expected to increase by 15 cents to $3.33 from $3.18 in FY18.
Based on these results, the new equity raising represents;
7.5% discount to the last closing price of $4.27 on 23 July 2019
6.0% discount to the 5-day VWAP of $4.20 on 23 July 2019
4.8% FY20 DPS yield
Abacus Trading Chart vs ASX200 AREIT Blue - Abacus, Purple ASX200 AREIT Last 12 months