NorthWest lifts Australian Unity bid to $2.8bn amid legal tussle

Canadian company NorthWest has upped the ante in its hostile takeover play for the Australian Unity Healthcare Property Trust.

Australian Unity executive general manager Mark Pratt.

Canadian company NorthWest has upped the ante in its hostile takeover play for the Australian Unity Healthcare Property Trust, bumping up its offer to $2.8bn and attacking the manager for striking a rival deal with listed group Dexus.

The listed group last week swept into the takeover battle for the Australian Unity fund, emerging as a white knight for the ­besieged manager, by backing a $320m equity raising and forming a property alliance.

Both sides of the takeover battle are now trading barbs with the incumbent manager saying that NorthWest’s tactics were most “un-GIC-like”, in reference to the Singaporean sovereign fund that is providing 70 per cent of the capital for the Canadian group’s bid for the trust.

Australian Unity executive general manager, property, Mark Pratt, warned the bid had the potential to confuse the trust’s small investors and many may end up not voting at a planned meeting.

Mr Pratt warned that NorthWest was trying to “railroad” ­retail investors, because if they did not vote the scheme may be more likely to be voted up, as it ­already had the support Melbourne-based Hume, which held about 16 per cent of the register.

Mr Pratt said it was “very surprising” to the manager that GIC – a respected global real estate investor – was “party to backing an organisation that is showing a complete and flagrant disregard of longstanding mum and dad Australian investors”.

The Canadian group lashed back at Australian Unity for not having an independent board for the health trust or having its bid reviewed independently. But Mr Pratt said the company was in close contact with investors and few wanted cash.

Both sides are also taking legal action, with Australian Unity battling to ensure documents that NorthWest is sending are accurate and that investors have enough time to consider them.

In what is NorthWest’s fourth proposal, the Canadian company has increased its offer price to $2.70 cash per wholesale unit, plus distributions, which is equivalent to a $2.8bn bid.

The offer price is a 21 per cent premium to the unit price and NorthWest-appointed independent expert Grant Thornton confirmed its opinion that the Canadian group’s scheme was fair and reasonable and was in the best interests of unitholders.

NorthWest also unveiled a $400m premium cash offer allowing the property trust investors to receive the $2.70 price irrespective of whether its bid went ahead.

The price offered is above the $2.60 currently being offered under the Australian Unity cash offer, which is capped at $80m.

NorthWest hit out at Australian Unity and Dexus for entering into a series of deals that it warned would entrench the ­existing manager and dilute unitholders.

Dexus is taking up a placement of units in the Australian Unity fund and has first rights over the management platform should it come to market, as part of its long-term commitment to healthcare property.

NorthWest has kicked off Supreme Court proceedings against both Australian Unity and Dexus over the deals, which it argued were designed to frustrate its bid.