Augusta lifts offer in revised bid for NPT management contract
Augusta Capital has hiked its offer to buy the management contract for NPT in a revised offer to run the listed property owner, having been rebuffed last year and forced to win over its fellow NPT shareholders to install a new board.
Auckland-based Augusta will pay $4.5 million for the management contract and has signed a non-binding agreement with NPT, subject to due diligence, finalising terms and shareholder approval, it said in a statement. Augusta won't be allowed to vote its 19 percent stake on the deal, which it says would generate annual fees totalling $900,000.
"Augusta has proposed a 'yield plus growth' investment strategy for NPT which Augusta believes will strongly differentiate NPT from other investment options in the listed property sector and suits the current low-yield environment," managing director Mark Francis and chief operating officer Guy French-Wright said. "The strategy would see Augusta tasked with re-positioning the existing portfolio of assets as well as identifying assets for acquisition which it believes have strong yield and growth opportunities."
The deal would be for a minimum of five years, after which NPT could exercise a right to end it with shareholder approval, and NPT's board, which was largely appointed at the urging of Augusta, said the proposed strategy was in line with its own preferred approach.
"We anticipate the process to move from agreement in principle to finalised documents that can be put before shareholders for consideration could take approximately six-to-10 weeks, although the Christmas period may interrupt that process," NPT chairman Bruce Cotterill said. "We will update shareholders as soon as possible."
In April, NPT shareholders voted on competing proposals for the management by Augusta and Kiwi Property Group, with Augusta ultimately winning out.
Augusta had planned to pay $3.5 million for the contract and facilitate several deals to expand NPT's assets under management, whereas Kiwi Property offered $6 million for the contract and would have poured two of its own properties into NPT for cash and shares and subscribed to new stock at a discount.
NPT shares were unchanged at 59 cents and have dropped 7.8 percent so far this year, while Augusta shares recently traded at $1.04 and have gained 6.4 percent this year.