Australian Unity trust seeks property partner

The management of the Australian Unity Healthcare Property Trust is understood to have made approaches to some real estate groups about forming a partnership to fend off its suitor NorthWest Healthcare Properties, according to sources.

NorthWest made a $2.5bn bid for the wholesale trust this year equating to $2.35 per unit, but was rebuffed by the fund’s management.

The fund owns 62 healthcare assets such as hospitals, medical centres and aged-care facilities that are highly sought after due to their defensive nature in a low interest rate environment.

Working with Australian Unity has been adviser Greenhill and groups approached are said to include those such as GPT, Dexus and Charter Hall.

Sources say that Australian Unity has been considering a move to find a major investor to make a placement in the trust of about 5-10 per cent at a premium to its current valuation.

However, some question at what price parties would be prepared to commit funds to the Australian Unity entity.

The Goldman Sachs-advised NorthWest has taken a somewhat hostile approach in its efforts to gain control of the fund, securing a stake of about 16 per cent after entering into option agreements with the Scanlan family-controlled Hume Partners.

It took a similar approach with Healthscope to gain control of its real estate assets, which it now owns in a joint venture with Singaporean sovereign wealth fund GIC. The fund bought a stake in hospital operator Healthscope when it was a takeover target about two years ago by BGH Capital and Brookfield, to buy itself a seat a the negotiating table.

With regard to the stake in the Australian Unity Healthcare fund, the Canadian fund paid a premium of about 10 per cent for its stake at a reported $2.2057 per unit.

Unitholders have been offered the chance to sell their interests in the fund to NorthWest at $2.35 per unit. In a defensive move, Australian Unity revalued its portfolio.

Groups like Dexus are said to have been keen on gaining an interest in the fund for some time. The fund’s investors are believed to be supporters of its current manager and a deal would trigger a major capital gains tax liability.

Australian Unity also sought a partner for the listed Australian Unity Office Fund when it was a takeover target by Starwood Capital as a defensive move, with Keppel taking a stake.

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