Centuria Capital Group has entered a bid implementation deed to merge with Primewest, creating one of the largest real estate managers on the ASX with $15.5 billion in assets.
Under the deal, Primewest shareholders will receive $1.51 per security made up of $0.20 in cash and $0.473 Centuria securities.
The Primewest board, which holds a 53% stake, recommends the merger and has confirmed it intends to accept the offer in the absence of a superior offer and subject to an independent expert's opinion.
The merged group will have $15.5 billion in assets under management (AUM) with a market cap of $2.2 billion, representing a 52% increase in AUM for Centuria and a 209% increase for Primewest.
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The group will also benefit from new distribution channels, enhanced geographic and sector diversification resulting in improved synergies to support the growth of assets under management and expansion of property services.
Centuria chair Garry Charny said the merger is consistent with Centuria's dual strategy of asset acquisitions and corporate M&A.
"Primewest is a high quality, well established fund manager and the Centuria board looks forward to the successful completion of the merger and building on Centuria's position as a leading Australasian property fund manager," Charny said.
As a part of the transaction, Primewest founders John Bond, David Schwartz and Jim Litis will enter two-year contracts as senior executives of Centuria.
In addition, Centuria intends on retaining Primewest's employees.
"The merger represents an exciting opportunity to combine two highly complementary real estate platforms that share similar philosophies and strong track records," Centuria joint chief executive John McBain said.
"Joint chief executive Jason Huljich and I will be delighted to welcome the Primewest executives to the Centuria group and look forward to working closely with them to grow the combined platform."
The proposal comes after Centuria announced three acquisitions for the Centuria Industrial Income Fund in January.