Centro's $10 billion merger

Trust merger

By Christine St Anne
Tue 28 Aug 2007

Property manager will amalgamate its US and Australian trusts to create a listed company with a market cap of about $4 billion. 

Property group Centro has plans to merge both its Australian and American retail trusts to create a listed company worth $10.1 billion.

The proposal includes the merger between the Centro Retail Trust (CER) and the Centro Shopping America Trust (CSF). The company will trade on Australian Securities Stock Exchange (ASX: CER). The merged trust will include a portfolio of 460 shopping centres located in Australia, New Zealand and the United States.

"This merger supports CER's strategy to acquire quality retail properties which add value for investors and effectively double CER's property portfolio. The acquisition also further diversifies CER's investment exposure from 228 to 460 shopping centres within the strongly performing Australia, New Zealand and US retail property markets," Centro Retail chair Brian Healey said.

The merger will occur through the issue of 0.655 CER securities for every one CSF security.

"Centro Retail investors will benefit from higher distributions, a more diverse property portfolio including quality Australasian assets, potential increased liquidity and a greater profile within the Australian listed property market," Centro chief executive Andrew Scott said.

The CER Board has unanimously recommended the merger proposal to CER investors, according to a statement from the company. Investors are expected to vote on the proposal in October 2007.

Centro will have a 50 per cent stake in the merged trust. After the announcment CER's shares closed at $1.72 yesterday. 

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