Alan Cameron to chair Australian Unity meeting for suitor NorthWest Healthcare Properties

The battle over Australian Unity’s healthcare property trust is heating up with former corporate regulator Alan Cameron called in.

Former ASIC chairman Alan Cameron. Picture: Britta Campion

The battle over Australian Unity’s healthcare property trust is sharpening with Canadian suitor NorthWest Healthcare Properties REIT calling in former corporate regulator Alan Cameron as independent chairman of a meeting it has called for July 1.

The move would result in the former Australian Securities & Investments Commission chief running the meeting that would decide the fate of the fund for which the Canadian group this week bumped up its offer to $2.7 billion.

Mr Cameron was previously chairman of ASIC for eight years, and now chairs the ASX Corporate Governance Council and NSW Law Reform Commission. His other roles include chairing Hastings Funds Management, Westpac’s insurance and funds companies, BuildingIQ and Property Exchange ­Australia.

At the same time, Australian Unity has mounted a fierce defence of its running of the fund and has lashed out at the unorthodox bid that NorthWest has lobbed, claiming there is little precedent for such a move.

Australian Unity has also taken issue with claims it had not engaged with NorthWest, saying it had done so but in order to reject bids by the Canadian company, which is backed by Singapore’s GIC, that it regarded as inadequate.

The Canadian group has put pressure on the manager for months and has now come out against Australian Unity for seeking out rival groups to help fend off its advances, warning that this could come at the expense of unitholders.

Australian Unity made approaches to private equity and real estate groups about forming a partnership and taking a stake in the business to fend off the aggressive NorthWest, which itself has secured a stake of about 16 per cent via purchases and ­option agreements with Melbourne-based Hume Partners.

Talks to secure a defensive stake by the Australian Unity fund have been held with KKR, GPT, Charter Hall and Dexus, The Australian’s DataRoom has reported. The fund owns 62 healthcare assets such as hospitals, medical centres and aged-care facilities and their value has been rising as investors seek out alternative property.

NorthWest president Craig Mitchell said the group had sought friendly engagement, but Australian Unity had “refused to engage, including since submission of our revised unconditional proposal”.

Mr Mitchell expressed concern that Australian Unity would team up with a rival manager and undertake a placement to them crimping investors.

“Northwest is concerned as a direct unitholder that such actions would be dilutive to unitholder value,” he said

Australian Unity executive general manager Mark Pratt said the bid by NorthWest “seems highly irregular to us” as most investors were small retail investors.

Mr Pratt said the move was highly unusual and the suitor “had not bothered to wait for Australian Unity’s response and was just seeking to rush retail investors into making a decision on a proposal”.

He noted that independent expert Grant Thornton – which has called the NorthWest bid fair and reasonable – appeared to have provided an opinion only on publicly available information.

Mr Pratt said the manager was always “looking to do things that are in the interests of unit holders” but would not be drawn on potential ties ups with rivals and instead pointed to rising values in the sector.

NorthWest still faces a steep 75 per cent hurdle to get its scheme up with each side suggesting that large shareholders were supportive of their approaches.

Australian Unity’s camp suggested the local investors want little truck with the foreign raiders and small investors are generally happy with their high performing trust that has been a trailblazer in the medical property arena.

But the suitor’s insist that large shareholders are unhappy with the failure of Australian Unity to engage with the Canadian company.