Property firms' merger terms agreed

Monday 15 April 2013

Property for Industry and Direct Property Fund’s boards have agreed on terms to proceed with a merger.

By The Landlord

“This transaction represents an exciting opportunity for PFI, allowing us to access a quality portfolio which doubles the size of our asset base, while bringing the equity from current DPF shareholders into PFI. This is a transformational transaction for both PFI and DPF shareholders, and we look forward to welcoming DPF shareholders to our register,” PFI chairman Peter Masfen said.

PFI will be the continuing entity, with DPF shareholders receiving 123.22 PFI shares for each DPF share held.

The negotiations recognised historical trading multiples for each entity, the historic earnings profiles of each entity, the portfolio characteristics of each entity, the costs associated with PFI raising capital to buy DPF’s assets, the costs of DPF listing independently and indexation and liquidity benefits for both PFI and DPF.

“We considered many factors in our negotiation of the appropriate merger ratio and look forward to the receipt of independent advice to progress this transaction,” Masfen said
PFI and DPF have commissioned Deloitte to prepare an independent expert report for both sets of shareholders.

PFI has also appointed PricewaterhouseCoopers to provide PFI shareholders with an appraisal report on the fairness of the revised base fee structure, which reflects a blending of the current PFI and DPF base fees.

Settlement is targeted for July 1, but is dependent on the Deloitte report and the approvals of both companies’ shareholders.

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