Australian Unity Investments (AUI) has entered an agreement to acquire the Westpac Diversified Property Fund (WDPF) through the purchase of the fund's responsible entity Westpac Funds Management Limited (WFML).
The transaction is the result of a recent internal review of the Westpac property funds management business and is expected to be completed on 30 September this year.
Once the purchase of WFML is complete, the WDPF will be renamed the Australian Unity Diversified Property Fund. Subsequent to the purchase, all current unitholders will retain their investment in the fund.
Under the terms of the acquisition agreement, AUI has committed to establishing the fund's liquidity by way of a series of three $10 million redemption offers during the current financial year, recapitalising the fund via a $40 million entitlement offer whereby existing unitholders can buy more units at a discount, and underwriting $10 million of the entitlement offer.
"The Diversified Property Fund will expand our property portfolio, diversify the product range we offer investors, and give us increased scale in the property sector, bringing our property funds under management to approximately $1.7 billion," AUI managing director David Bryant said.
"Our intention is to continue to provide unitholders with consistent income as well as the potential for capital growth and to return a measure of liquidity to the fund through patient asset and capital management," he said.
As part of the transaction, AUI will buy Westpac's unitholding in the property fund and will be looking to extend the term of the debt facility held by the WDPF from May 2011 to September 2013.
