Commonwealth Bank sells Kiwi Income stake at 3.6 percent discount in placement

Tuesday 17th December 2013

Commonwealth Bank of Australia has sold out of Kiwi Income Property Trust at a 3.6 percent discount to where the units were trading just before yesterday's placement, raising $92.2 million.

The biggest Australian bank by market value sold 87 million units at $1.06 apiece in a placement yesterday after unitholders last week voted in favour of buying the property investor's management contract from CBA for $70.5 million. The units were bought by institutional and retail investors domestically and abroad, Kiwi Income said in a statement.

"The board viewed CBA's disposal of its interest in the Trust as a natural outcome following the internalisation of the trust's management that was completed last week," said Mark Ford, chairman of the trust's manager. "The board expresses its appreciation to CBA and its affiliates for their positive contribution to the trust over the past decade."

The units will resume trading today, after they were halted at $1.10. The units have declined 4.4 percent this year, making it the worst performing listed property investor in the NZX 50 Index, followed by DNZ Property Fund, which is down 3.5 percent this year.

CBA floated the internalisation in July before settling on a deal last month.

BusinessDesk.co.nz

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