Aliro launches $400 million takeover bid for office fund Aust Unity

Shares of the fund jumped 24¢, or 11%, to $2.43 as investors embraced news of the takeover. The offer is subject to Aliro’s due diligence as well as a recommendation from the entity responsible for the fund, which is considering Aliro’s proposal.

The offer quickly gained traction, winning the support of the fund’s largest shareholder, Hume Partners, a boutique investment platform backed by the family office of Rich Lister Peter Scanlon.

Hume has proven to be a key player in the fund’s fortunes in recent years, joining Hong Kong-based hedge fund Maso Capital, private investor Valtellina Properties and Rich Lister Sam Tarascio in sabotaging the merger plan more early this year.

At the time, investors in the listed fund – which has a portfolio of seven office buildings in Sydney, Brisbane, Adelaide and Canberra – were unimpressed with the ability to diversify their portfolio with smaller retail assets.

When it became clear that at least 40% of the ledger was against the merger, Australian Unity announced that it was changing course, to pursue both the option of selling individual assets while opening up the prospect of a portfolio sale through a corporate transaction.

Three years ago, a proposed $495 million takeover by Charter Hall and Abacus of the Australian Unity-managed office fund was recommended by the board, but was also overruled by shareholder opposition.

Alongside Daniel Wise, Mr Southon co-founded Aliro Group in 2017, having left Charter Hall a year earlier.

With approximately $1.6 billion under management to date and a pipeline worth up to $4.5 billion, the Aliro platform has grown rapidly, including through a series of industry acquisitions. He is also involved in a construction business for rent.

In an initial note to clients, Tim Leahy, who heads UBS’ real estate dealing desk, wrote that the cash offer was actually closer to the fund’s estimated NTA – brought down by the expiration of the lease. at Parramatta – around $2.50, and the risk of an intruding bid seemed low.

Jose C. Birney