Why are Australian Unity Office Fund (ASX:AOF) shares flying high?

3 min read | May 30, 2022 06:36 PM AEST | By Sonal Goyal

Why are Australian Unity Office Fund (ASX:AOF) shares flying high? — Image source: © Sasinparaksa | Megapixl.com

Highlights

Australian Unity Office Fund shares have gained 12.04% in last five trading sessions.

AOF received a non-binding acquisition offer from Aliro Group.

The proposal was received on 27 May 2022, after the market close.

Shares of the Australian Unity Office Fund (ASX:AOF) jumped 10.958 high on the ASX after the company informed that it has received an acquisition proposal from Aliro Group. The shares closed at AU$2.430 apiece. Including today’s gain, the share prices are up by 12.50% in the last five trading sessions, and the year-to-date gain is 7.05%. However, the share prices have dipped by 10.33% in a year.

The benchmark index, ASX 200 A-REIT (XPJ) closed 1.622% up.

Australian Unity Office Fund is an ASX-listed real estate company that invests in properties across CBD markets in Canberra, Brisbane, Melbourne, Adelaide, and Sydney and the Australian metropolitan. The fund focuses on enhancing capital values and growing net property income through asset management. The company aims to maintain a capital structure with gearing below 40%.

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Details of the proposal to acquire AOF

AOF informed the market on Monday morning that its responsible entity, Australian Unity Investment Real Estate Limited (AUIREL), received a non-binding and all-cash proposal from Aliro Group to buy all the issued units of AOF. Aliro Group presented the proposal in place of the Aliro Group Office Value Fund (AGOVF).

AOF said that it received the proposal on 27 May 2022, after the market closed.

Aliro, funds and investment management and property development group, has proposed to buy all units of AOF for AU$2.45 cash per unit. The company proposed to acquire the firm through a trust of the scheme.

The proposal includes a statement of support from one of the largest unitholders of AOF – Hume Partners Pty Ltd. Hume has 19.97% holdings in AOF. An investment house, Hume shared its intent to vote in favour of the proposal.

Image source: © Rfischia | Megapixl.com

The proposal has also talked about the distributions to unitholders of AOF. Up to 3.80 cents per unit will be distributed to AOF shareholders for the period ending on 30 June 2022. Up to 1.50 cents per unit for the period ending 30 September 2022. After 30 September 2022, till the proposal becomes active, 0.50 cents per unit will be distributed for each month.

The transaction is subject to multiple approvals, for example, approval of final terms by AGOVF and Aliro and the foreign investment review board.

The financial adviser of AOF for this proposal is the Highbury Partnership, and the legal adviser is King & Wood Mallesons. AOF will create an independent board committee to consider and assess the proposal.

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