360 Capital Group have agreed to acquire a listed investment vehicle and management company in an $80M deal.
As part of the deal 360 Capital FM Limited as responsible entity for 360 Capital Total Return Active Fund and 360 Capital Total Return Passive Fund (ASX: TOT) propose to acquire 100% of the issued capital of URB whilst TGP will pay Contact Asset Management Pty Limited $2.5 million for the management rights of the Trust.
The deal will boost 360 Capital’s market capitalisation to about $170m and lifts its gross assets to about $178m and increases TOT’s investor base to over 3,500 investors.
URB is a Listed Investment Company, established in October 2016 which aims to maximise total Shareholder returns through a combination of capital and income growth generated by an Investment Portfolio that is focused upon urban renewal and regeneration. It invests in direct property and equities. in the year to June 2019, Net assets of the Company grew from $78.4m to $87.5m, including an Equity Portfolio valued at $45.3m, a Direct Property portfolio valued at $11.5m and Cash and Dividends receivable of $29.8m. Total Shareholder Return for the year to 30 June 2019 was 20.1%,
The deal between TOT and URB will be undertaken by a scheme of arrangement and will be voted on at a December meeting. URB’s board intends to unanimously recommend shareholders vote for the scheme, in the absence of a superior proposal and subject to an independent expert report.
URB shareholders will receive 0.9833 360 Total Return units for each share they hold. Based on the price of $1.18, the implied value of the scheme is about $1.16 per URB share, incorporating a 3 per cent premium to the URB adjusted pre-tax NTA per share of $1.136.
The implied value of the Scheme Consideration represents the following premiums to relevant URB Share price benchmarks:
13.2% premium to URB’s closing price prior to the date of this announcement;
12.3% premium to URB's 30-day VWAP;
7.2% premium to URB's 3-month VWAP; and
29.6% premium to URB's trading price of $0.895 on 24 May 2019 (being the date prior to TOT commencing to buy URB Shares).