Asset Plus Limited · NZX:APL
Asset Plus — NPT — Merger or Acquisition (March 2017)
31 slides from Asset Plus's merger presentation, March 2017
Slide 1: Kiwi Property Proposal
Kiwi Property Proposal March 2017
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by NPT Limited (“NPT”) in relation to the Kiwi Property Proposal and the proposed Entitlement Offer of new fully paid ordinary shares (“New Shares”) in NPT to eligible shareholders under clause 19 of Schedule 1 to the Financial Markets Conduct Act 2013
Slide 3: Agenda
Agenda 1. Introduction 2. Summary of the Kiwi Property Proposal 3. Rationale for the Kiwi Property Proposal 4. Risks and mitigation strategies 5. Portfolio summary 3
Slide 4: 1. Introduction
1. Introduction
Slide 5: Introduction
Introduction During the course of 2016, NPT received a number of transformational proposals, including from Kiwi Property Group Limited (“Kiwi Property”) (the “Kiwi Property Proposal”) and Augusta Capital Limited (“Augusta”) The Board of NPT has undertaken a thorough review and commissioned advi
Slide 6: 2. Summary of the Kiwi Property Proposal
2. Summary of the Kiwi Property Proposal
Slide 7: Summary of the Kiwi Property Proposal
Summary of the Kiwi Property Proposal NPT subsidiaries will purchase The Majestic Centre in central Wellington and North City Shopping Centre in Porirua (together the “Kiwi Properties”) from a Kiwi Property subsidiary for total consideration of $230 million. This price is supported by independent
Slide 8: Key highlights of the Kiwi Property Proposal to NPT and NPT shareholders
Key highlights of the Kiwi Property Proposal to NPT and NPT shareholders Provides the best opportunity to create long-term value for shareholders when weighed against alternatives presented to NPT, including the status quo Expected to drive a 9.7% increase to FY18F1 pro forma Distributable Profi
Slide 9: Adds two quality properties to NPT's portfolio
Adds two quality properties to NPT’s portfolio The Majestic Centre, Wellington CBD1 North City Shopping Centre, Porirua1 Value $121.8 million Value4 $114.0 million Net lettable area 24,473 sqm Net lettable area 25,071 sqm Capitalisation rate2 7.25% Capitalisation rate2 7.63% Passing yield3 6.37% Pas
Slide 10: NPT to adopt 'Core-Plus' investment strategy
On completion of the Kiwi Property Proposal, NPT will target superior returns and growth through a ‘Core-Plus’ strategy Strategy will target a diversified property portfolio, spread across the main centres NPT to adopt of Auckland, Wellington and Christchurch, with selected provincial exposures ‘C
Slide 11: Consideration and funding of the Kiwi Property Proposal
Consideration and funding of the Kiwi Property Proposal Funding for the Kiwi Property Proposal is expected to be derived from 1: – $86.6 million of bank debt under extended bank debt facilities – the $93.9 million Entitlement Offer – the issuance of 80.5 million of new shares to Kiwi Property for
Slide 12: Summary financial metrics
Summary financial metrics NPT standalone1 FY18F pro forma for Kiwi Property FY17B FY18F Proposal Distributable Profit per share (unadjusted for the impact of the 3.75 3.75 4.01 Entitlement Offer) (cents) Distributable Profit per share adjusted for the impact of the 3.66 3.66 4.01 Entitlement Offer (
Slide 13: Governance
Governance NPT will continue to have a Board that includes independent directors who are appointed by shareholders as required by the Listing Rules The Board will continue to be responsible for the corporate governance of NPT, including oversight of the Management Agreement and performance of Ki
Slide 14: 3. Rationale for the Kiwi Property Proposal
3. Rationale for the Kiwi Property Proposal
Slide 15: Provides scale and improves portfolio quality
Provides scale and improves portfolio quality The Kiwi Properties are consistent with NPT’s existing investment strategy, which is founded on a diversified nationwide portfolio of retail, commercial and industrial buildings The combined portfolio will continue to have attractive property portfol
Slide 16: Enhanced earnings and dividends for NPT shareholders
Enhanced earnings and dividends for NPT shareholders Based on the terms of the acquisition of the Kiwi Properties and the current expected size of the Entitlement Offer, the Board expects that the Kiwi Property Proposal will result in improved distributable earnings to shareholders in the first fu
Slide 17: More diverse property portfolio with enhanced tenant profile
More diverse property portfolio with enhanced tenant profile NPT post-completion of the Kiwi NPT standalone Commentary Property Proposal Hawke's Bay, Hawke's Bay, Establishes a significant 16% 7% presence in the Wellington NPT geographic Christchurch, market Auckland, 17% exposure 42% A more sca
Slide 18: Increased market cap expected to enhance liquidity and broaden investor interest
Increased market cap expected to enhance liquidity and broaden investor interest The Kiwi Property Proposal and the Entitlement Offer are expected to more than double NPT’s market capitalisation and should over time lead to an expanded shareholder base – NPT expects this will result in greater sha
Slide 19: Partnering with Kiwi Property creates a platform for future growth
Partnering with Kiwi Property creates a platform for future growth Immediately following completion of the Kiwi Property Proposal, NPT will have: – A portfolio value in excess of $400 million – Expanded debt facilities of up to $170 million. ~$58 million is already drawn under existing debt Greate
Slide 20: More favourable management structure
More favourable management structure Of the proposals received by NPT, the majority required the externalisation of management through a new management agreement with varying terms for the contract purchase price, ongoing fees and the level of services provided In assessing the alternative propo
Slide 21: Conclusion
Conclusion The Kiwi Property Proposal is a transformational transaction that would reposition NPT with the scale and resources to best serve its shareholders’ interests: ─ Provides access to Kiwi Property’s specialist management capabilities to intensively manage assets and drive investment perfor
Slide 22: 4. Risks and mitigation strategies
4. Risks and mitigation strategies
Slide 23: Risks and mitigation strategies
Risks and mitigation strategies Risk Mitigation strategies If Resolution 1 is not approved by shareholders, or if any Transaction costs are not material of the transactions under the Kiwi Property Proposal are in the context of the Kiwi Property not implemented, NPT will have incurred significan
Slide 24: Risks and mitigation strategies (cont.)
Risks and mitigation strategies (cont.) Risk Mitigation strategies The works to be undertaken by Kiwi Property Holdings Kiwi Property has obtained Limited at North City described above are expected to external engineering analysis of North City bring the relevant areas of the property up to at l
Slide 25: Risks and mitigation strategies (cont.)
Risks and mitigation strategies (cont.) Risk Mitigation strategies If the Kiwi Property Proposal is implemented, NPT will be Kiwi Property is the largest listed reliant on the management of Kiwi Property and the property vehicle on the NZX Main expertise of Kiwi Property’s management team Board
Slide 26: Risks and mitigation strategies (cont.)
Risks and mitigation strategies (cont.) Risk Mitigation strategies NPT expects that it will need to raise approximately $94 New Shares will be offered on a million under the Entitlement Offer as part of the funding pro rata basis to Shareholders who for the acquisition of the Kiwi Properties. Al
Slide 27: 5. Portfolio summary
5. Portfolio summary
Slide 28: Overall portfolio summary
Overall portfolio summary Property Location Sector Value Net Cap. Passing Occupancy WALT4 Number 4 ($ million)1 lettable rate2 yield3 of area (sqm) tenants NPT properties Eastgate Shopping Centre Christchurch Retail $58.0 28,679 8.3% 7.9% 96.3% 4.8 years 55 AA Centre Auckland Office $36.7 12,284 7.8
Slide 29: NPT property profiles
NPT property profiles Eastgate Shopping Centre, Christchurch AA Centre, Auckland $58.0 $36.7 Value Value million million Net lettable area 28,679 sqm Net lettable area 12,284 sqm Capitalisation rate 8.3% Capitalisation rate 7.8% Passing yield 7.9% Passing yield 8.3% Occupancy 96.3% Occupancy 92.2% W
Slide 30: NPT property profiles (cont.)
NPT property profiles (cont.) 22 Stoddard Road, Auckland Heinz Wattie’s Distribution Centre, Hawke’s Bay $35.0 $27.2 Value Value million million Net lettable area 8,412 sqm Net lettable area 60,059 sqm Capitalisation rate 6.6% Capitalisation rate 8.1% Passing yield 6.4% Passing yield 8.1% Occupancy
Slide 31: NPT property profiles (cont.)
NPT property profiles (cont.) Print Place, Christchurch $13.0 Value million Net lettable area 12,793 sqm Capitalisation rate 9.8% Passing yield 10.5% Occupancy 100.0% WALT 1.5 years Industrial property set in attractive grounds including a high- stud warehouse and factory space with associated off