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ANZ exits Vital Healthcare as OnePath sells management contract

Monday 5th December 2011

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Australia & New Zealand Banking has exited Vital Healthcare Property Trust, selling its remaining 9 percent stake and the management contract of the property trust to a Canadian property investor.

ANZ-subsidiary OnePath New Zealand agreed to sell management rights for the healthcare-focused property trust for $11.5 million to NorthWest Value Partners. That’s $5.5 million more than what Vital’s independent directors Bill Thurston and Graeme Horsley were willing to accept for OnePath to internalise management. Under the terms of the agreement, NorthWest will offer employment to the existing management team.

The Canadian investor also agreed to buy 26.1 million units, or 9 percent of Vital Healthcare, for $31.3 million, or $1.20 a unit, from a separate ANZ subsidiary, AUT Investments. That will lift NorthWest’s stake to 19.8 percent, just shy of the 20 percent cap that would require it to make a formal takeover. AUT paid $31.2 million for the stake in September, quashing opposition to the bank’s offer to sell the management contract.

“The agreement with NorthWest represents a good outcome for Vital unitholders as it preserves continuity of the current management, backed by the expertise of a global owner and manager of real estate assets with deep experience in the specialised healthcare property sector,” OnePath director John Body said in a statement.

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’s units were unchanged at $1.15 in trading today, and have gained 8.5 percent this year.

NorthWest has acquired more than C$1 billion of real estate assets, and floated the NorthWest Healthcare Properties Real Estate Investment Trust on the Toronto Stock Exchange last year. The trust owns and manages a diversified portfolio of 45 income-producing properties, with a focus on medical office buildings, according to its website.

This year, NorthWest broadened its focus to look at global healthcare assets, with Australia and New Zealand, Germany and Brazil flagged for its initial investments.

In September, NorthWest paid 27.4 million euros to buy the German portfolio of Capital Care Group, having missed out on buying a stake in Australia’s ING Real Estate Healthcare Fund earlier this year.

NorthWest will make an address to unitholders at tomorrow’s annual meeting in Auckland.

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