Australian Unity not a seller, but queue of potential buyers forming

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Investment bank Greenhill is understood to have been drafted in by Australian Unity to help defend it from suitors hoping to gain control of its $2bn healthcare portfolio.

Canada’s NorthWest Healthcare Properties is said to be making efforts to buy Australian Unity’s Healthcare Property Trust, hiring Goldman Sachs in an attempt to launch an assault on the wholesale fund.

But it will need to get in line.

The owner of $1.9bn worth of hospitals, medical centres and aged care facilities, it is understood to be also highly sought after by a number of other powerful real estate players in the market, with Dexus Property Group also said to be keen on the business and thought to have even made its own approaches.

Industry experts have hosed down the likelihood of any transaction unfolding, saying that Australian Unity is not a seller.

The fund’s investors are also believed to be supporters of its current manager and could oppose a deal, which would trigger a major capital gains tax liability.

Yet should the investors in the fund – a number of which are believed to be retail investors – prove to be keen sellers, the thinking among market experts is that real estate heavyweights will also be knocking on Australian Unity’s door, including MIRA, Charter Hall and Brookfield.

NorthWest, though, is considered aggressive when it comes to takeovers, with the fund buying a stake in hospital operator Healthscope when it was a takeover target about two years ago.

This was done to buy itself a seat a the negotiating table.

As a result, it wound up gaining control of half of the Healthscope real estate portfolio for $2.4bn, in a deal backed by Singaporean sovereign wealth fund GIC.

Some suspect that GIC could be funding a NorthWest proposal.

Greenhill worked with Australian Unity when Charter Hall and Abacus Property made a play for the listed Australian Unity Office Fund, but shareholders voted against a transaction.

Market sources say Hume Partners - one of the office fund’s major shareholders which opposed that takeover - is also on the register of the healthcare fund.

Greenhill is also likely to win the role to sell Westpac’s superannuation business, although is not thought to have yet officially won a mandate.

The Australian Unity Healthcare Property Trust generates a 5.03 per cent distribution and 6.39 per cent annual capital growth.

While real estate is currently sought after by investors amid a low interest rate environment, healthcare assets are a preferred choice due to their defensive nature.