AMP Capital Diversified Property Fund and Dexus tussle heads for April meeting showdown
A vote later this month sets the scene for a showdown between AMP and Dexus.
AMP Capital Diversified Property Fund’s unitholders will late this month vote on whether to merge with a rival Dexus fund, as jostling for control of the $5bn vehicle comes to a head.
The Weekend Australian understands a vote has been set for April 27, with respective notice of meetings having been dispatched within the past few days to make a last-minute plea for support.
That sets the scene for a showdown between the two sides, with sources saying they are both also seeking to manage unitholder requests for fund redemptions amounting to between $1bn and $2bn.
The tussle is between the Dexus Wholesale Property Fund and AMP Capital, the latter having put forward an alternative proposal to fend off the merger.
The marriage of the funds was recommended by the AMP fund’s independent board committee in mid-March, as it endorsed a move away from parent entity AMP as uncertainty clouded the ownership of its broader capital division.
The diversified fund’s holdings include stakes in the Quay Quarter in Sydney’s central business district, the Gold Coast’s Pacific Fair retail and conference centre and the Macquarie Centre at North Ryde in Sydney.
For the funds merger to proceed, 75 per cent of unitholders of AMP’s diversified fund must vote in favour. AMP is excluded from voting.
Holders of the Dexus wholesale fund must also give the green light to the merger, and a lower approval threshold of 50 per cent in favour is required from that camp.
AMP’s broader real estate division and funds — where more than $28bn is managed — is causing headaches for the under-pressure parent entity, which is pursuing a sale of its private markets division. That unit sits within the capital division and includes real estate and infrastructure investments.
AMP in February outlined a non-binding deal to sell 60 per cent of its private markets division to US firm Ares Management, raising the ire of some investors who wanted a say in who managed AMP’s property funds.
Transaction negotiations have dragged on, though, and haven’t resulted in a binding deal between AMP and Ares, after a 30-day exclusivity period expired last weekend.
Ares has also since flagged interest in acquiring 100 per cent of the division, rather than a majority stake.
The potential acquirer will be closely watching developments in AMP’s real estate unit and the April 27 vote, which sources said was purposefully scheduled to happen ahead of the AMP group’s online annual general meeting three days later.
Additionally, Ares is monitoring another AMP real estate fund that is considering strategic options. It is the flagship $7bn AMP Capital Wholesale Office Fund, which has tapped investment bank Jarden — and has set up a high-profile advisory committee — to advise on its future.
The advisory committee comprises top real estate and corporate figures; former Future Fund property head Barry Brakey, Wesfarmers director Sharon Waburton and property veteran Paul Say.
On the upcoming vote for the diversified fund, AMP’s counter proposal is said to include cutting management fees and a capital commitment of $840m, which includes purchasing two retail assets and providing fund liquidity.
Dexus’s proposal also identifies assets that will be sold to meet redemption requests, if the requests are still active on the approval of a merger.
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