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ANZ Bank aims to quash Vital Healthcare internalisation with 9% stake

Friday 23rd September 2011

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Australia & New Zealand Banking Group wants to shut down a bid to bring Vital Healthcare Property Trust’s management in-house, having boosted its stake in the healthcare property investor yesterday.

The bank, whose OnePath New Zealand; subsidiary manages Vital, has decided not to press ahead with a bid to internalise the management contract after negotiations stalled with the independent directors. ANZ’s AUT Investments paid $31.2 million to buy 26.1 million units from its OnePath unit and Accident Compensation Corp. yesterday.

“The independent directors are disappointed that due to events outside their control, they have been unable at this time to conclude negotiations and put forward a proposal on internalisation,” the company said in a statement. “The independent directors remain of the view that internalisation and/or corporatisation is in the best interests of unitholders.”

OnePath owns the manager of Vital whose negotiations with independent directors Bill Thurston and Graeme Horsley stalled over a $2 million price gap. OnePath wasn’t willing to accept less than $8 million to sell the management contract, having already slashed $6 million from its starting point.

Vital said if ACC and Ascot Property Management, which wants to dump the manager and take over the internalisation process, want to proceed with their proposed resolutions, those will be dealt with at the December annual meeting.

The property trust lifted annual earnings 50% to $18.2 million on growth in rental income, having completed a programme of buying up healthcare property across the Tasman.

OnePath charges an annual fee of 0.75% of the gross value of Vital’s assets plus certain incentives under the current management contract.

The units fell 0.9% to $1.15 in trading today, and have gained 6.6% this year.


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