Argosy trustee focuses on Grant Samuel independence

The independent trustee of listed Argosy Property Trust has reiterated the arguments marshalled by the trust’s manager, OnePath.

Guardian Trust, appointed by the Argosy manager when the unit trust was established, has highlighted the costs and disruption of dismissing the manager, as some unitholders are seeking.

Guardian Trust also highlighted the independence of investment advisory firm, Grant Samuel, which is writing a report for unitholders.

“There has been some speculation that Grant Samuel is not independent. However, we are not aware of evidence that would justify this conclusion. From our enquiries of Grant Samuel they have confirmed to us that they are independent and will state this in their report when it is completed,” Guardian Trust said.

The independence of such reports has occasionally been questioned because they are usually commissioned by interested parties rather than chosen by ballot.

Guardian Trust said there is considerable interest in the terms of reference for the independent report. Grant Samuel has been engaged to evaluate the following:
*the price being paid to acquire the management rights and how this compares with fair value
*impact of the release of liability of the manager and the manager's continuing indemnity under the proposed internalisation
*implications and risks of not having limits on the costs and expenses to be reimbursed from the trust under the proposed internalisation
*one-off costs associated with implementing the proposed internalisation
*governance and management of the trust under the internalised structure
*proposed changes to the trust deed; alternatives to the proposed transaction (such as the DNZ proposal)
*the effect of the proposed internalisation on the trust's ability to enter into subsequent transactions
*whether the proposed internalisation is in the best interests of unit holders when compared to the status quo and any other alternatives.

OnePath wants to put its proposed resolutions to unitholders for a $20 million payout to internalise the management (with the same management team) at an annual meeting in August.

But DNZ Property Fund (also a unitholder) wants to hold an earlier meeting to consider its alternative merger plan and has applied to the High Court to requisition a meeting. The heqring is set down for July 26.

Guardian Trust said that there is no reason to remove OnePath at this stage because it is not in breach of any obligations, and there would be costs in appointing an interim manager until a new manager is found.

“The manager has announced that it is of the view that at this time a takeover of Argosy by DNZ is unlikely to be in the unit holders' interests, however, it will remain open to considering such an initiative in the future. We consider that the reasons provided by the manager appear to be reasonable and appropriate at this stage,” Guardian Trust said.