ASX Release | Media Release 360 Capital Industrial Fund
Level 8, 56 Pitt Street Sydney NSW 2000 | GPO Box 5483, Sydney NSW 2001 Australia T +61 2 8405 8860 | Fax +61 2 9238 0354 | E [email protected] | W www.360capital.com.au 360 Capital Investment Management Limited ABN 38 133 363 185 AFSL 340 304 as responsible entity of the 360 Capital Industrial Fund ARSN 099 680 252
24 March 2015
Third Supplementary Bidder’s Statement
360 Capital Investment Management Limited (360 Capital) as responsible entity for the 360 Capital Industrial Fund (Bidder or TIX) refers to the off-market takeover bid (TIX Offer) which it has made for all the units in Australian Industrial REIT (ANI).
Attached is a copy of a letter which has been sent today to ANI unitholders in relation to the TIX Offer and which includes details of:
• an increase in the consideration offered under the TIX Offer and increase in the separate cash payment which may become payable in connection with the TIX Offer; and
• an extension of the offer period for the TIX Offer so that it will close at 7.00pm (Sydney time) on Wednesday, 15 April 2015 (unless further extended).
In compliance with section 647(3)(b) of the Corporations Act 2001 (Cth), the Bidder also attaches a copy of the third supplementary bidder's statement dated 24 March 2015 (Third Supplementary Bidder's Statement) in respect of the TIX Offer referred to in that letter.
The Third Supplementary Bidder's Statement was lodged with ASIC and given to ANI earlier today.
The management presentation referred to that letter will be separately released to ASX.
Yours sincerely,
Alan Sutton Company Secretary 360 Capital Investment Management Limited Enc.
More information on the TIX Offer can be found on the ASX’s website at www.asx.com.au using the Fund’s ASX code “TIX”, on the Fund’s website www.360capital.com.au, or by calling the TIX Offer Information Line on 1800 247 697 (callers in Australia) or +61 2 8024 1189 (callers outside Australia) between 8.30am and 5.30pm (Sydney time) on Business Days.
Alternatively, please contact:
Tony Pitt Managing Director 360 Capital Group +61 2 8405 8865
Ben James Chief Investment Officer 360 Capital Group +61 2 8405 8871
About 360 Capital Industrial Fund (ASX code TIX) 360 Capital Industrial Fund is an ASX-listed Fund focused on passive rent collecting from warehouse and logistics properties in Australia in the $10.0 million plus range. The Fund has strong, defensive, income-focused investment fundamentals via a diversified $544 million portfolio of 22 quality assets, a weighted average lease expiry of 5.8 years, occupancy of 99.9%, distributions tax deferred at approximately 50% to 60% and a forecast FY15 distribution of 20.0cpu. The Fund is externally managed by 360 Capital Group, a leading ASX-listed real estate investor and fund manager that operates under a transparent fee structure and is the largest unitholder in the Fund to ensure ongoing alignment of interests with Unitholders. About 360 Capital Group (ASX code TGP) 360 Capital Group is an ASX-listed, property investment and funds management group concentrating on strategic investment and active investment management of property assets. The company actively invests in direct property assets, property securities and various corporate real estate acquisitions within Australian real estate markets on a private equity basis. 360 Capital Group’s 21 full time staff have significant property, funds and investment management experience. 360 Capital Group manages nine investment vehicles holding assets valued at over $1.1 billion on behalf of over 8,300 investors and has over $177 million worth of co-investments across the 360 Capital Group.
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24 March 2015
Dear ANI Unitholder,
IMPORTANT - 360 CAPITAL INDUSTRIAL FUND HAS INCREASED ITS OFFER FOR AUSTRALIAN INDUSTRIAL REIT AND DECLARED THE OFFER FINAL IN THE ABSENCE OF A COMPETING PROPOSAL
You would have already received a Bidder's Statement in relation to the proposed off-market takeover of Australian Industrial REIT (ASX code: ANI) by 360 Capital Industrial Fund (ASX code: TIX) (the TIX Offer) dated 3 February 2013.
We now enclose a Third Supplementary Bidder’s Statement, accompanying presentation and acceptance form which outline an Improved Proposal which is final and will not be increased in the absence of a competing proposal.
The TIX Offer closing date has been extended to 7.00pm (Sydney time) on 15 April 2015. If you do not accept by the closing date, you will miss out on the benefits of the revised TIX Offer.
IMPROVED TIX OFFER, CASH PAYMENT AND IMPLIED VALUE OF $2.541 PER ANI UNIT
Eligible ANI Unitholders who accept the TIX Offer will now receive for each ANI Unit:
0.90 TIX Units and cash of 4.5 cents2 as the TIX Consideration under the TIX Offer; and
A Cash Payment from 360 Capital of 10.0 cents, subject to the satisfaction of the Cash Payment Condition.
The implied value of the TIX Offer inclusive of the Cash Payment is $2.542 per ANI Unit (Improved Proposal).
THE KEY REASONS YOU SHOULD ACCEPT THE TIX OFFER INCLUDE3:
26.4% premium to ANI’s stated 31 December 2014 pro forma NTA per Unit of $2.014
Improved earnings, distributions, NTA and gearing
FY16 forecast earnings increase by 2.5% to 20.9 cents5 per equivalent ANI Unit
FY16 forecast distributions increase by 5.7% to 20.3 cents5 per equivalent ANI Unit
NTA per equivalent ANI Unit together with the Cash Payment increases 5.5% to $2.12
In addition, 360 Capital may seek to remove the Fife Capital as responsible entity to ANI. If this occurs, 360 Capital will waive up to 50% of the management fees and distribute the savings to ANI Unitholders. Refer to the enclosed presentation for more information.
ANI Unitholders are encouraged to ACCEPT THE TIX OFFER NOW to receive the advantages outlined above and in the Bidder's Statement.
To accept, please complete and sign the Acceptance Form enclosed with the Third Supplementary Bidder’s Statement and return the enclosed Acceptance Form so that your acceptance may be processed before 7.00pm on 15 April 2015 using the replied paid envelope, as per the instructions on page 5 of the Bidder’s Statement or the Acceptance Form.
The Improved Proposal is final and will not be increased in the absence of a competing proposal
1. Implied value of the TIX Offer inclusive of the cash payment based on the closing price of TIX Units on 19 March 2015 of $2.71 adjusted for the TIX March 2015 quarter distribution of
5.0662 cents per Unit 2. This cash payment will give ANI Unitholders equivalent value to the TIX March 2015 quarterly distribution of 4.5 cents per equivalent ANI Unit which will not be paid to ANI
Unitholders who accept the TIX Offer as all Conditions will not have been satisfied or waived in sufficient time so as to enable those ANI Unitholders to participate in that distribution. 3. Full details and relevant assumptions are set out in the enclosed Third Supplementary Bidder’s Statement 4. ANI pro forma stand-alone NTA per Unit at 31 December 2014 includes a reduction for ANI transaction costs of $4.4m 5 Includes the impact of reinvesting the Cash Payment (for more details refer to the Third Supplementary Bidder’s Statement)
360 Capital Investment Management Limited ABN 38 133 363 185
Level 8, 56 Pitt Street Sydney NSW 2000
Phone: (02) 8405 8860 Fax: (02) 9238 0354
Web: www.360capital.com.au
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For details on the Improved Proposal, including the key points in this letter please refer to the original Bidder’s Statement and subsequent Second and Third Supplementary Bidder’s Statements.
Further details can be found on the ASX’s website at www.asx.com.au using the Fund’s ASX code “TIX”, on the Fund’s website www.360capital.com.au, or by contacting the TIX Offer Information Line on 1800 247 697 (callers in Australia or +61 2 8024 1189 (callers outside Australia) between 8.30am and 5.30pm (Sydney time) on Business Days.
Yours sincerely,
David van Aanholt Independent Chairman 360 Capital Investment Management Limited as responsible entity for the 360 Capital Industrial Fund
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in respect of an off-market takeover bid to acquire all the units in
Australian Industrial REIT (ARSN 165 651 301) (ASX: ANI) from
360 Capital Investment Management Limited (ACN 133 363 185),
in its capacity as responsible entity of the 360 Capital Industrial Fund (ARSN 099 680 252) (ASX: TIX)
THIRD SUPPLEMENTARY BIDDER’S STATEMENT24 March 2015
ACCEPT Now – BEST AND FINAL oFFER
IN THE ABSENCE oF A CoMPETINg PRoPoSAL
IMPRovED TIX oFFER & INCREASED CASH PAYMENTFor each ANI Unit:• 0.90 TIX Units and cash of 4.5 cents1 as the TIX Consideration under
the TIX offer; and• a Cash Payment from 360 Capital of 10.0 cents2
The implied value3 of $2.54 per ANI Unit inclusive of the Cash Payment
1 This cash payment will give ANI Unitholders equivalent value to the TIX March 2015 quarter distribution of 4.5 cents per equivalent ANI Unit which will not be paid to ANI Unitholders who accept the TIX Offer as all Conditions will not have been satisfied or waived in sufficient time so as to enable those ANI Unitholders to participate in that distribution.
2 Payment of the Cash Payment is subject to the satisfaction of the Cash Payment Condition.
3 Based on the closing price of TIX Units on 19 March 2015 of $2.71 adjusted for the TIX March 2015 quarter distribution of 5.0662 cents per Unit.
THIS IS AN IMPORTANT DOCUMENT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt as to how to act, you should consult your financial or legal adviser as soon as possible.
If you have any questions about the TIX offer, please call the TIX offer Information Line on 1800 247 697 (callers in Australia) or +61 2 8024 1189 (callers outside Australia) between 8.30am and 5.30pm (Sydney time) on Business Days.
The TIX offer will close at 7.00pm (Sydney time) on 15 April 2015, unless withdrawn or extended.
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This document is the third supplementary bidder’s statement (Third Supplementary Bidder’s Statement) to the bidder’s statement dated 3 February 2015 issued by 360 Capital Investment Management Limited (ACN 133 363 185) in its capacity as responsible entity of the 360 Capital Industrial Fund (ARSN 099 680 252) (Bidder) and lodged with the Australian Securities and Investments Commission (ASIC), in relation to the off-market takeover bid made by Bidder for all the units in Australian Industrial REIT (ARSN 165 651 301). A first supplementary bidder’s statement (First Supplementary Bidder’s Statement) and a replacement bidder’s statement (Bidder’s Statement) were lodged with ASIC on 13 February 2015. A second supplementary bidder’s statement was lodged with ASIC on 23 February 2015 (Second Supplementary Bidder’s Statement). This Third Supplementary Bidder’s Statement is given in compliance with section 643 of the Corporations Act 2001 (Cth).
Unless the context requires otherwise, capitalised terms in this Third Supplementary Bidder’s Statement have the same meaning given to them in section 12 of the Bidder’s Statement. This Third Supplementary Bidder’s Statement is to be read together with the Bidder’s Statement, the First Supplementary Bidder’s Statement and the Second Supplementary Bidder’s Statement. In the event of any inconsistency with the Bidder’s Statement, the Third Supplementary Bidder’s Statement prevails.
A copy of this Third Supplementary Bidder’s Statement was lodged with ASIC on 24 March 2015. Neither ASIC nor any of its officers takes any responsibility for the contents of this Third Supplementary Bidder’s Statement.
IMPoRTANT INFoRMATIoNF
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IMPORTANT INFORMATION IFC
1 BACKGROUND TO THIS DOCUMENT 2
2 UPDATED TERMS FOR THE TIX OFFER AND CASH PAyMENT 2
3 THE TIX PORTFOLIO HAS BEEN REvALUED 3
4 IMPACT OF THE IMPROvED PROPOSAL ON FORECAST Fy16 EARNINGS AND DISTRIBUTIONS PER EqUIvALENT ANI UNIT 3
5 360 CAPITAL AS RESPONSIBLE ENTITy OF ANI 3
6 KEy HIGHLIGHTS OF THE IMPROvED PROPOSAL 4
7 NO APPROvAL REqUIRED FOR 360 CAPITAL TO ACCEPT ITS 12.89% INTEREST INTO TIX OFFER 7
8 UPDATED FINANCIAL INFORMATION REGARDING THE COMBINED GROUP 7
9 NOTICES OF vARIATIONS 17
10 APPROvAL 17
ATTACHMENT 1 – NOTICE OF vARIATION FOR INCREASE IN TIX OFFER 18
ATTACHMENT 2 – NOTICE OF vARIATION FOR EXTENSION OF OFFER PERIOD 21
TABLE oF CoNTENTSF
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Third Supplementary Bidder’s Statement 2
1 Background to this documentThis Third Supplementary Bidder’s Statement includes a number of important updates in relation to the TIX Offer including:
(a) the Improved Proposal which includes an increase in the TIX Consideration under the TIX Offer and an increase in the Cash Payment;
(b) the declaration by TIX that the Improved Proposal is its best and final offer in the absence of a competing proposal;
(c) the extension of the Offer Period to 15 April 2015;
(d) a revaluation of the assets of TIX;
(e) the implications of 360 Capital replacing Fife Funds as responsible entity of ANI;
(f) key highlights of the Improved Proposal; and
(g) financial information for the Combined Group.
360 Capital believes that the Improved Proposal is very attractive for ANI Unitholders and encourages all ANI Unitholders to read this Third Supplementary Bidder’s Statement and accept the TIX offer to receive the benefit of the Improved Proposal.
2 Updated terms for the TIX Offer and Cash Payment
2.1 The TIX Consideration and Cash Payment has been increased The Bidder has varied the TIX Offer and 360 Capital Group has increased the Cash Payment such that ANI Unitholders who accept the TIX Offer and are entitled to receive the TIX Consideration1 will now receive for each ANI Unit:
●● 0.90 TIX Units and cash of 4.5 cents2,3 as the TIX Consideration under the TIX Offer; and
●● a Cash Payment from 360 Capital of 10.0 cents, subject to the satisfaction of the Cash Payment Condition
(together the Improved Proposal)
Based on the closing price of TIX Units on 19 March 2015, the implied value4 of the TIX Offer of 0.90 TIX Units and 4.5 cents in cash is $2.44 per ANI Unit and, inclusive of the Cash Payment, is $2.54 per ANI Unit.
Attached to this Third Supplementary Bidder’s Statement is a formal Notice of Variation in respect of the increase of the TIX Offer.
2.2 Improved Proposal including the TIX Consideration and the Cash Payment will not be increased in the absence of a competing proposalThe Improved Proposal including the TIX Offer and the Cash Payment is the Bidder’s best and final offer and will not be increased in the absence of a competing proposal.5
2.3 The Offer Period for the TIX Offer has been extendedThe Bidder has extended the close of the TIX Offer to 7.00pm (Sydney time) Wednesday, 15 April 2015 (unless further extended or withdrawn).
The increase in the TIX Consideration under the TIX Offer as described in section 2.1 above results in an automatic extension of the Offer Period by 14 days.
TIX has also varied the TIX Offer to extend the Offer Period by a further 8 days so that the Offer Period has been extended by a total of 22 days. Attached to this Third Supplementary Bidder’s Statement is a formal Notice of Variation in respect of this extension of the Offer Period.
1 Ineligible Foreign Unitholders and Unmarketable Parcel Unitholders refer to section 11.5.4 of the Bidder’s Statement.
2 This cash payment will give ANI Unitholders equivalent value to the TIX March 2015 quarter distribution of 4.5 cents per equivalent ANI Unit which will not be paid to ANI Unitholders who accept the TIX Offer as all Conditions will not have been satisfied or waived in sufficient time so as to enable those ANI Unitholders to participate in that distribution.
3 For income tax purposes the treatment of the cash component of 4.5 cents of the TIX Consideration will be equivalent to the treatment of the Cash Payment. References to the Cash Payment in section 7 of the Bidders Statement should be taken to include the cash component of the TIX Consideration.
4 Implied value of the TIX Offer inclusive of the Cash Payment based on the closing price of TIX Units on 19 March 2015 of $2.71 adjusted for the TIX March 2015 quarter distribution of 5.0662 cents per Unit.
5 A competing proposal includes a proposal pursuant to which (1) a third party would acquire control (as defined in section 50AA of the Corporations Act) of ANI; (2) the responsible entity of ANI would be replaced with a third party; (3) a third party would acquire more than 15% of the units in ANI.
THIRD SUPPLEMENTARY BIDDER’S STATEMENTF
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Third Supplementary Bidder’s Statement 3
3 The TIX portfolio has been revaluedAs announced to the ASX on 17 March 2015, 13 properties in the TIX portfolio have been revalued, which results in the entire portfolio being valued at $543.5 million, representing an increase of 3.3% to the total portfolio value as at 31 December 2014.6
The revaluation is expected to have the following impact on TIX and the Combined Group:7
●● the TIX stand-alone pro forma NTA has increased by 14 cents to $2.33 per TIX Unit;
●● Combined Group pro forma NTA per equivalent ANI Unit (inclusive of the Cash Payment) increases from $1.97 to $2.12, representing a 5.5% increase to ANI stand-alone pro forma NTA of $2.01;8 and
●● Combined Group pro forma gearing (post sale of Non-Core Assets) will reduce from 41.2% to 40.8%.
The increase in asset values was largely attributable to a combination of income growth and capitalisation rate compression (refer to TIX’s ASX announcement 17 March 2015).
4 Impact of the Improved Proposal on forecast Fy16 earnings and distributions per equivalent ANI UnitTIX has determined that the Improved Proposal (including the Cash Payment) has the following impact on Combined Group forecast FY16 earnings and distributions per equivalent ANI Unit.7
The Combined Group forecast FY16 earnings per equivalent ANI Unit is 20.9 cents, which:
●● represents a 2.5% increase to ANI’s FY16 stand-alone earnings guidance; and
●● includes the impact of reinvesting the Cash Payment in the Combined Group at a price of $2.66 per unit (based on the closing price of TIX Units on 19 March 2015 of $2.71 adjusted for the TIX March 2015 quarter distribution of 5.0662 cents per Unit) and a forecast FY16 earnings yield of 8.38%.
The Combined Group forecast FY16 distribution per equivalent ANI Unit is 20.3 cents, which:
●● represents a 5.7% increase to ANI’s FY16 stand-alone distribution guidance; and
●● includes the impact of reinvesting the Cash Payment in the Combined Group at a price of $2.66 per unit (based on the closing price of TIX Units on 19 March 2015 of $2.71 adjusted for the TIX March 2015 quarter distribution of 5.0662 cents per Unit) and a forecast FY16 distribution yield of 8.11%.
5 360 Capital as responsible entity of ANIWhere a member of the 360 Capital Group is appointed responsible entity and TIX acquires less than 100% of ANI, 360 Capital will manage ANI as set out below.
(a) Proposed management structure:360 Capital Group will ensure that:
●● a dedicated responsible entity will be appointed to be the responsible entity of ANI which will not be the responsible entity of any other 360 Capital Group managed fund;
●● the responsible entity will have an Independent Board with a majority of independent directors that are not executives or directors of any other member of the 360 Capital Group;
●● appropriate conflict management protocols will be adopted to manage potential conflicts between the interests of ANI and TIX; and
●● a dedicated ANI fund manager will be appointed to manage ANI.
Details of the relevant entity and independent directors will be included in the notice of meeting for the ANI Unitholders to consider resolutions to replace the responsible entity.9
6 Including the post period acquisition of 136 Zillmere Road, Boondall, QLD. Refer to TIX announcement to ASX titled “Property Valuations Increase NTA by $0.14 to $2.33 per Unit” dated 17 March 2015. ANI Unitholders may obtain a copy of this announcement on request, free of charge, during the Offer Period, by calling the TIX Offer Information Line on 1800 247 697 (callers in Australia) or +61 2 8024 1189 (callers outside Australia) between 8.30am and 5.30pm (Sydney time) on Business Days.
7 Assuming 100% ownership of ANI. Refer to section 8 for details of other relevant assumptions.
8 ANI stand-alone pro forma NTA includes a reduction for ANI transaction costs of $4.4m (as described on page 66 of the Target’s Statement).
9 The entity which will act as responsible entity has not yet been decided and the process of identifying independent directors has not yet commenced.
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Third Supplementary Bidder’s Statement 4
(b) Management fees360 Capital will waive up to 50% of the management fees due to the 360 Capital Group member which acts as responsible entity and distribute the savings to ANI Unitholders. Please see section 6.4 for further details of the waiver including the impact of the fee reduction on forecast FY16 earnings and distributions per equivalent ANI Unit.
360 Capital believes that the proposed approach as set out above addresses any concerns that may exist regarding potential conflicts of interest in relation to the management of ANI by the 360 Capital group.
6 Key Highlights of the Improved Proposal
6.1 Attractive premium to ANI UnitholdersBased on the closing price of TIX Units on 19 March 2015, the implied value10 of the TIX Offer of 0.90 TIX Units and 4.5 cents in cash is $2.44 per ANI Unit and, inclusive of the Cash Payment, is $2.54 per ANI Unit.
The implied value of the TIX Offer during the Offer Period will change according to movements in the ASX market value of TIX Units.
The implied value (inclusive of the Cash Payment) of $2.54 per ANI Unit equates to a:
●● 26.4% premium11 to ANI’s stated 31 December NTA per ANI Unit of $2.01;12
●● 23.3% premium11 to ANI’s 30 day VWAP to 5 December 2014 of $2.06 (adjusted for the ANI December 2014 distribution), the day prior to 360 CIML lodging its substantial unitholder notification with ASX; and
●● 16.5% premium11 to ANI’s closing price on 17 December 2014 of $2.18 (adjusted for the ANI December 2014 distribution) the day prior to TIX confirming to the market its indicative non-binding proposal for the acquisition of ANI by TIX by way of an agreed trust scheme.
TIX offer premium to ANI benchmark prices
ANI pro formaNTA per Unit
ANI 30 day VWAP before substantial holder notice lodged (as at 5 Dec 14)
ANI closing price before indicative scheme proposal disclosed (as at 17 Dec 14)
$2.01 $2.06 $2.18
Implied value (inclusive of the Cash Payment) = $2.54
Premium26.4%
Premium23.3%
Premium16.5%
TIX offer premium to ANI Unit price trading history (since listing)
$1.90
$2.00
$2.10
$2.20
$2.30
$2.40
$2.50
$2.60
Oct 1
3
Nov
13
Dec
13
Jan
14
Feb
14
Mar
14
Arp
14
May
14
Jun
14
Jul 1
4
Aug
14
Sep
14
Oct 1
4
Nov
14
Dec
14
Jan
15
Feb
15
ANI closing price
Impled value (inclusive of the Cash Payment)
Implied value11 (inclusive of the Cash Payment) = $2.54
360 Capitalbegins acquiring
pre-bid stake
360 Capital announces bid 19 Dec 14
ANI has never traded above the impled value
Significant premium
10 Implied value of the TIX Offer inclusive of the Cash Payment based on the closing price of TIX Units on 19 March 2015 of $2.71 adjusted for the TIX March 2015 quarter distribution of 5.0662 cents per Unit
11 The implied value of the TIX Offer, excluding the Cash Payment, of $2.44 per ANI Unit equates to premia of 21.4%, 18.4% and 11.9% to the ANI benchmark prices set out in the bullets above respectively.
12 ANI stand-alone pro forma NTA includes a reduction for ANI transaction costs of $4.4m (as described on page 66 of the Target’s Statement).
SECTIoN 5 (CONTINUED)
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Third Supplementary Bidder’s Statement 5
6.2 The TIX Offer inclusive of the Cash Payment is EPU and DPU accretive
Accretion13 to ANI stand-alone FY16 EPU guidance
ANI stand-alone FY16 EPU guidance
Cent
s pe
r Uni
t
Combined Group FY16 EPU forecastper equivalent ANI Unit
20.4 20.1
20.9
0.8
2.5% increase for ANI Unitholders
Accretion13 to ANI stand-alone FY16 DPU guidance
ANI stand-alone FY16 DPU guidance
Cent
s pe
r Uni
t
Combined Group FY16 DPU forecastper equivalent ANI Unit
19.2 19.4
20.3
0.9
5.7% increase for ANI Unitholders
6.3 The TIX Offer inclusive of the Cash Payment is NTA accretive
Accretion to ANI stand-alone pro forma NTA14
ANI pro forma NTA Combined Group NTA per equivalent ANI Unit
$0.05
$2.01
$0.10
$2.02
$2.12$2.06
5.5% increase for ANI Unitholders
13 Assuming 100% ownership of ANI, assuming also that the Cash Payment is reinvested in TIX Units at a price of $2.66 per unit (closing price of TIX Units on 19 March 2015 adjusted for the TIX March 2015 quarter distribution of 5.0662 cents per Unit) and based on other assumptions set out in section 8.
14 Assumes 100% ownership of ANI. The ANI pro forma NTA includes a reduction for ANI transaction costs of $4.4m. The right hand column does not include the cash component of the TIX Consideration. Refer to section 8 for details of other relevant assumptions.
Assumed reinvestment of the 10 cents per Unit Cash Payment into the Combined group
Assumed reinvestment of the 10 cents per Unit Cash Payment into the Combined group
Cash Payment from 360 Capital of 10 cents per Unit
ANI’s NTA is now $2.01 per Unit after taking into account ANI defence costs of 5.0 cents per ANI UnitF
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Third Supplementary Bidder’s Statement 6
15 The percentage waived will equal the percentage of ANI Units accepted into the TIX Offer (up to a maximum of 50%). The waiver only applies where a member of the 360 Capital Group is appointed as responsible entity of ANI and TIX acquires less than 100% of ANI.
16 On the basis that TIX acquires less than 100% of ANI.
6.4 360 Capital’s proposed strategy as responsible entity and waiver of management fees360 Capital has outlined its strategy in the event that TIX acquires less than 100% of ANI and a member of the 360 Capital Group is appointed responsible entity (see section 5 of this Third Supplementary Bidder’s Statement). 360 Capital believes that the proposed approach addresses any concerns that may exist regarding potential conflicts of interest in relation to the management of ANI by the 360 Capital Group.
As noted above, 360 Capital will also waive up to 50% of the management fees due to the 360 Capital Group member which acts as responsible entity of ANI and the savings will be distributed to ANI Unitholders.15
The graphs below show the positive impact of a 30% - 50% fee reduction on forecast FY16 earnings and distribution per stand-alone ANI Unit.
Forecast FY16 earnings per stand-alone ANI Unit under various ownership scenarios16
20.0
20.4
20.8
21.2
21.6
Current ANI earnings under Fife Funds
ANI earnings under 360 Capital after fee reduction of
30%
ANI earnings under 360 Capital after fee reduction of
40%
ANI earnings under 360 Capital after fee reduction of
50%
Earn
ings
(cen
ts p
er U
nit)
21.0
21.2
21.4
20.4
Forecast FY16 distributions per stand-alone ANI Unit under various ownership scenarios16
18.5
18.9
19.3
19.7
20.1
20.5
Current ANI distributionunder Fife Funds
ANI distribution under 360 Capital after fee reduction of
30%
ANI distribution under 360 Capital after fee reduction of
40%
ANI distribution under 360 Capital after fee reduction of
50%
Dist
ribut
ion
(cen
ts p
er U
nit)
19.820.0
20.2
19.2
SECTIoN 6 (CONTINUED)
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Third Supplementary Bidder’s Statement 7
7 No approval required for 360 Capital to accept its 12.89% interest into TIX OfferFife Funds refers in section 5.13 of the Target’s Statement to a potential requirement for TIX to obtain unitholder approval under ASX Listing Rule 10.1 in order for the 12.89% interest in ANI held by a member of the 360 Capital Group to be accepted into the TIX Offer.
The Bidder confirms that ASX has granted TIX a waiver from ASX Listing Rule 10.1 which enables the relevant member of the 360 Capital Group to accept the TIX Offer in respect of that 12.89% interest without obtaining TIX unitholder approval.
Accordingly, there is no requirement for a meeting of TIX Unitholders to be held, and no other regulatory approval required, in order for the 12.89% interest to be accepted into the TIX Offer.
8 Updated financial information regarding the Combined GroupThe financial information set out in section 6 of the Bidder’s Statement has been updated as set out below to reflect:
In the case of the pro forma historic statements of financial position:
●● The impact of the Improved Proposal (described in section 2.1);
●● The ANI stand-alone Pro Forma Historic Statement of Financial Position now includes published ANI accounts as at 31 December 2014;
●● ANI stated defence costs of $4.4 million relating to the TIX Offer as described on page 66 of ANI’s Target Statement have accordingly been adjusted against ANI’s stand-alone Pro Forma Historic Statement of Financial Position; and
●● The TIX stand-alone Pro Forma Historic Statement of Financial Position now includes an uplift in investment properties of $17.5 million as a result of the revaluation of 13 properties as at 31 March 2015 (described in section 3).
In the case of the pro forma Operating Earnings and distribution per unit:
●● The impact of the Improved Proposal, (described in section 2.1);
●● Cash Payment assumed to be reinvested in the Combined Group at $2.66 per Unit (based on the closing price of TIX Units on 19 March 2015 of $2.71 adjusted for the TIX March 2015 quarter distribution of 5.0662 cents per Unit);
●● The waiver of 50% of the management fees due to 360 Capital as the responsible entity of ANI as set out in section 6.4 in the year ending 30 June 2015 and 30 June 2016 under the 50.1% Ownership Case; and
●● An assumed payout ratio of 97% for the Combined Group in FY16.
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Third Supplementary Bidder’s Statement 8
8.1 Pro forma historic statement of financial position
Pro forma Historic Statement of Financial Position TIX stand-alone
Reviewed TIX
Pro Forma Adjustments Unaudited Pro Forma TIX
Stand-alone
31 Dec 2014 ($m) ($m) Notes 31 Dec 2014 ($m)
Current assetsCash 3.0 (2.0) (i) 1.0Trade and Other Receivables 3.4 (1.2) (ii) 2.2Total Current Assets 6.4 3.2
Non-Current AssetsInvestment Properties 501.0 42.5 (iii) 543.5Total Non-Current Assets 501.0 543.5Total Assets 507.4 546.7
Current LiabilitiesTrade and Other Payables 4.5 4.5Distribution Payable 6.2 (6.2) (iv) – Total Current Liabilities 10.7 4.5
Non-Current LiabilitiesInterest Bearing Liabilities 225.2 26.0 (v) 251.2Derivative Financial Instruments 3.0 (2.8) (vi) 0.2Total Non-Current Liabilities 228.2 251.4Total Liabilities 238.9 255.9Net Assets 268.5 290.8
EquityIssued Equity 324.3 6.2 (iv) 330.5Retained Earnings (55.7) 16.0 (vii) (39.7)Total Equity 268.6 290.8Number of Units on Issue (million) 122.4 2.5 (viii) 124.9Gearing 44.4% 46.2%NTA per Unit ($) 2.19 2.33
Note:
– Gearing is calculated as interest bearing liabilities (excluding capitalised borrowing costs) less cash divided by total tangible assets (excluding Goodwill) less cash. The Unaudited Pro Forma TIX Stand-alone interest bearing liabilities are $253.0 million excluding capitalised borrowing costs.
– Net tangible assets is calculated as total tangible assets (excluding Goodwill) divided by units on issue.
Directors’ Pro Forma Adjustments TIX stand-alone
TIX adjustments for events post 31 December 2014 as if they had occurred at 31 December 2014:
i. Excess cash of $2.0 million used alongside debt to fund the acquisition of 136 Zillmere Road, Boondall QLD reduces cash to $1.0 million.
ii. Reduction in receivables of $1.2 million representing the deposit paid in December 2014 for the acquisition of 136 Zillmere Road, Boondall QLD reduces receivables to $2.2 million.
iii. Settlement of 136 Zillmere Road, Boondall, QLD in January 2015 for $25.0 million (excluding stamp duty and due diligence costs) and revaluations of 13 investment properties as at 31 March 2015 amounting in an uplift in the value of investment properties of $17.5 million.
iv. Payment of the December 2014 quarter distribution comprising $6.2 million and corresponding issue of equity under the fully underwritten Distribution Reinvestment Plan (‘DRP’), decreases distribution payable to NIL and increases issued equity to $330.5 million.
v. Draw down of Debt Facility to fund property acquisition, associated acquisition costs and the termination of an existing derivative financial instrument. Total interest bearing liabilities increase to $251.2 million.
vi. Termination of an existing derivative financial instrument.
vii. Gain in revaluations of investment properties as at 31 March 2015 of $17.5 million offset by the write-off of acquisition costs including stamp duty and due diligence costs in relation to 136 Zillmere Road, Boondall, QLD.
viii. Issue of new units relating December 2014 quarter DRP, increasing total units on issue to 124.9 million.
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Third Supplementary Bidder’s Statement 9
Pro Forma Historic Statement of Financial Position ANI stand-alone
Reviewed ANI
Pro Forma Adjustments Unaudited Pro Forma ANI
Stand-alone
31 Dec 2014 ($m) ($m) Notes 31 Dec 2014 ($m)
Current assetsCash 1.5 1.5Trade and Other Receivables 0.6 0.6Rental Guarantee 0.3 0.3Total Current Assets 2.4 2.4
Non-Current AssetsInvestment Properties 320.0 320.0Rental Guarantee 0.1 0.1Total Non-Current Assets 320.1 320.1Total Assets 322.5 322.5
Current LiabilitiesTrade and Other Payables 2.5 2.5Distribution Payable 8.3 8.3Total Current Liabilities 10.8 10.8
Non-Current LiabilitiesInterest Bearing Liabilities 111.2 7.0 (i) 118.2Derivative Financial Instruments 2.6 (2.6) (ii) – Total Non-Current Liabilities 113.8 118.2Total Liabilities 124.5 129.0Net Assets 198.0 193.5
EquityIssued Equity 188.9 188.9Retained Earnings 9.0 (4.4) (iii) 4.6Total Equity 197.9 193.5Number of Units on Issue (million) 96.3 96.3Gearing 34.4% 36.6%NTA per Unit ($) 2.06 2.01
Note:
– Gearing is calculated as interest bearing liabilities (excluding capitalised borrowing costs) less cash divided by total tangible assets (excluding Goodwill) less cash. The Unaudited Pro Forma ANI Stand-alone interest bearing liabilities are $119.0 million excluding capitalised borrowing costs.
– NTA per unit is calculated as total tangible assets (excluding Goodwill) divided by units on issue.
Directors’ Pro Forma Adjustments ANI stand-alone
ANI adjustments for events post 31 December 2014
i. Draw down of Debt Facility to fund $4.4 million in consultant fees for defence costs committed to by ANI in relation to the TIX Offer (as described on page 66 of ANI’s Target’s Statement) and the termination of existing derivative financial instruments ($2.6 million). Total interest bearing liabilities increase to $118.2 million.
ii. Termination of an existing derivative financial instruments (as announced 28 January 2015), payout assumed to be at 31 December 2014 value.
iii. Decrease in retained earnings of $4.4 million relates to the write-off of ANI consultant fees (as described on page 66 of ANI’s Target’s Statement).For
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Third Supplementary Bidder’s Statement 10
8.2 Impact of the Improved Proposal on the Combined Group
Pro forma Historic Statement of Financial Position for 100% ownership case
Unaudited Pro Forma TIX
Stand-alone
Unaudited Pro Forma ANI
Stand-alone
Pro Forma Adjustments
Unaudited Pro Forma
Combined group
31 Dec 2014 ($m) 31 Dec 2014 ($m) ($m) Notes 31 Dec 2014 ($m)
Current assetsCash 1.0 1.5 2.5Trade and Other Receivables 2.2 0.6 2.8Rental Guarantees – 0.3 0.3Total Current Assets 3.2 2.4 5.6
Non-Current AssetsInvestment Properties 543.5 320.0 (i) 863.5Rental Guarantees – 0.1 0.1Goodwill – – 41.3 (ii) 41.3Total Non-Current Assets 543.5 320.1 904.9Total Assets 546.7 322.5 910.5
Current LiabilitiesTrade and Other Payables 4.5 2.5 7.0Distribution Payable – 8.3 8.3Total Current Liabilities 4.5 10.8 15.3
Non-Current LiabilitiesInterest Bearing Liabilities 251.2 118.2 11.4 (iii) 380.8Derivative Financial Instruments 0.2 – 0.2Total Non-Current Liabilities 251.4 118.2 381.0Total Liabilities 255.9 128.9 396.3Net Assets 290.8 193.6 514.2
EquityIssued Equity 330.5 188.9 37.7 (iv) 557.1Retained Earnings (39.7) 4.6 (7.8) (v) (42.9)Total Equity 290.8 193.5 514.2Number of Units on Issue (million) 124.9 96.3 (9.7) (vi) 211.5Gearing 46.2% 36.6% (vii) 43.9%NTA per Unit ($) 2.33 2.01 (viii) 2.24
Note:
– Gearing is calculated as interest bearing liabilities (excluding capitalised borrowing costs) less cash divided by total tangible assets (excluding Goodwill) less cash. The Combined Group Pro Forma interest bearing liabilities is $383.4 million excluding capitalised borrowing costs.
– NTA per unit is calculated as total tangible assets (excluding Goodwill) divided by units on issue.
– NTA per unit of the Combined Group is $2.02 on an equivalent ANI Unit basis (excludes any impact of the Cash Payment of $0.10).
SECTIoN 8 (CONTINUED)
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Third Supplementary Bidder’s Statement 11
Directors’ Pro Forma Adjustments for 100% ownership
1. The TIX Offer is assumed to complete on 31 December 2014 as follows:
●● TIX acquires 100% ANI issued units, and in accordance with AAS, TIX will consolidate ANI as a business combination.
●● TIX appoints 360 RE as the RE of ANI.
●● Non-Core Asset Sales as described in section 5.5 have not been assumed.
2. Acquiring 100% ownership interest in ANI has the following pro forma statement of financial position impacts for TIX (these notes relate to the preceding table):
i. TIX investment properties increase to $863.9 million (including rental guarantees).
ii. Goodwill on acquisition of ANI reflecting the premium of the TIX Consideration at implied offer price $2.44 per unit over ANI’s NTA per unit multiplied by total ANI issued units, goodwill recognised of $41.3 million.
iii. Draw down of Debt Facility of $11.4 million to fund the payment of stamp duty of $3.2 million, TIX’s consultant fees of $3.9 million and the cash component of the TIX Offer of $4.3 million. Combined Group interest bearing liabilities increase to $380.8 million.
iv. TIX’s issued equity increases by $226.6 million to $557.1 million, representing the value of additional TIX Units issued to ANI Unitholders in accordance with the TIX Offer net of equity raising costs.
v. Decrease in retained earnings of $7.8 million includes the write-off of transaction costs associated with the TIX Offer including stamp duty and the elimination of ANI pre-acquisition retained earnings.
vi. TIX Units on issue increase to 211.5 million via the issue of an addition 86.6 million TIX Units for the acquisition of ANI in accordance with the TIX Offer.
vii. TIX Pro Forma Gearing is reduced to 43.9% (prior to Non-Core Asset Sales).
viii. TIX Pro Forma NTA decreases to $2.24 per unit.
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Third Supplementary Bidder’s Statement 12
Pro Forma Historic Statement of Financial Position for 50.1% ownership
Unaudited Pro Forma TIX
Stand-alone
Unaudited Pro Forma ANI
Stand-alone
Pro Forma Adjustments
Unaudited Pro Forma
Combined group
31 Dec 2014 ($m) 31 Dec 2014 ($m) ($m) Notes 31 Dec 2014 ($m)
Current assetsCash 1.0 1.5 2.5Trade and Other Receivables 2.2 0.6 2.8Rental Guarantees – 0.3 0.3Total Current Assets 3.2 2.4 5.6
Non-Current AssetsInvestment Properties 543.5 320.0 (i) 863.5Rental Guarantees – 0.1 0.1Goodwill – – 20.8 (ii) 20.8Total Non-Current Assets 543.5 320.1 884.4Total Assets 546.7 322.5 890.0
Current LiabilitiesTrade and Other Payables 4.5 2.5 7.0Distribution Payable - 8.3 8.3Total Current Liabilities 4.5 10.8 15.3
Non-Current LiabilitiesInterest Bearing Liabilities 251.2 118.2 5.3 (iii) 374.7Derivative Financial Instruments 0.2 – 0.2Total Non-Current Liabilities 251.4 118.2 374.9Total Liabilities 255.9 129.0 390.2Net Assets 290.8 193.5 499.8
EquityIssued Equity 330.5 188.9 (76.5) (iv) 442.9Retained Earnings (39.7) 4.5 (4.6) (v) (39.7)Total Equity Attributable to Unitholders
290.8 193.5 403.2
External Non-Controlling Interest – – 96.6 (vi) 96.6Total Equity 290.8 193.5 499.8Number of Units on Issue (million) 124.9 96.3 (52.9) (vii) 168.3Gearing 46.2% 36.6% (viii) 43.2%NTA per Unit ($) 2.33 2.01 (ix) 2.27
Note:
– Gearing is calculated as interest bearing liabilities (excluding capitalised borrowing costs) less cash divided by total tangible assets (excluding Goodwill) less cash. The Combined Group Pro Forma interest bearing liabilities is $377.5 million excluding capitalised borrowing costs.
– NTA per unit is calculated as total tangible assets (excluding Goodwill) divided by units on issue.
– NTA per unit of the Combined Group is $2.04 on an equivalent ANI Unit basis (excludes any impact of the Cash Payment of $0.10).
SECTIoN 8 (CONTINUED)
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Third Supplementary Bidder’s Statement 13
Directors’ Pro Forma Adjustments for 50.1% ownership
1. The TIX Offer is assumed to complete on 31 December 2014 as follows:
●● TIX acquires 50.1% of outstanding ANI Units, and in accordance with AAS, TIX will consolidate ANI as a business combination and will reflect the proportionate ownership of the 49.9% non-controlling interest as an adjustment in equity.
●● TIX deemed to control ANI and appoints 360 RE as RE of ANI.
●● Non-Core Asset Sales as described in section 5.5 have not been assumed.
2. Acquiring 50.1% ownership interest in ANI has the following pro forma statement of financial position impacts for TIX (these notes relate to the preceding table):
i. TIX investment properties increase to $863.9 million (including rental guarantees).
ii. Goodwill on acquisition of ANI reflecting the premium of the TIX Consideration at implied offer price $2.44 per unit over ANI’s NTA per unit multiplied by 50.1% of ANI issued units, goodwill recognised of $20.8 million.
iii. Draw down of Debt Facility of $5.3 million to fund the payment of TIX’s consultant fees of $3.1 million and the cash component of the TIX Offer of $2.2 million. Combined Group interest bearing liabilities increase to $374.7 million.
iv. TIX’s issued equity increases by $112.4 million to $442.9 million, representing the value of additional TIX Units issued to ANI Unitholders in accordance with TIX Offer net of equity raising costs.
v. Decrease in retained earnings of $4.6 million being the elimination of ANI pre-acquisition retained earnings.
vi. Non-controlling equity interest reflecting the proportionate ownership of the 49.9% non-controlling interest, increases to $96.6 million.
vii. TIX Units on issue increase to 168.3 million via the issue of an additional 43.4 million TIX Units for the acquisition of 50.1% of ANI in accordance with the TIX Offer.
viii. TIX Pro Forma Gearing is reduced to 43.2% (prior to Non-Core Asset Sales).
ix. TIX Pro Forma NTA decreases to $2.27 per unit.
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Third Supplementary Bidder’s Statement 14
Pro Forma Historic Statement of Financial Position for 30% ownership
Unaudited Pro Forma TIX
Stand-alone
Pro Forma Adjustments Unaudited Pro Forma
Combined group
31 Dec 2014 ($m) ($m) Notes 31 Dec 2014 ($m)
Current assetsCash 1.0 1.0Trade and Other Receivables 2.2 2.2Rental Guarantees – - Total Current Assets 3.2 3.2
Non-Current AssetsInvestment Properties 543.5 (i) 543.5Rental Guarantees – – Financial Assets at Fair Value through Profit or Loss
– 69.1 (ii) 69.1
Total Non-Current Assets 543.5 612.6Total Assets 546.7 615.8
Current LiabilitiesTrade and Other Payables 4.5 4.5Distribution Payable – – Total Current Liabilities 4.5 4.5
Non-Current LiabilitiesInterest Bearing Liabilities 251.2 1.9 (iii) 253.1Derivative Financial Instruments 0.2 0.2Total Non-Current Liabilities 251.4 253.3Total Liabilities 255.9 257.8Net Assets 290.8 358.0
EquityIssued Equity 330.5 68.5 (iv) 399.0Retained Earnings (39.7) (1.3) (v) (41.0)Total Equity 290.8 358.0Number of Units on Issue (million) 124.9 26.0 (vi) 150.9Gearing 46.2% (vii) 41.3%NTA per Unit ($) 2.33 (viii) 1.91
Note:
– Gearing is calculated as interest bearing liabilities (excluding capitalised borrowing costs) less cash divided by total tangible assets (excluding Goodwill) less cash. The Combined Group Pro Forma interest bearing liabilities is $254.9 million excluding capitalised borrowing costs.
– NTA per unit is calculated as total tangible assets (excluding Goodwill) divided by units on issue.
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Third Supplementary Bidder’s Statement 15
Directors’ Pro Forma Adjustments for 30% ownership
1. The TIX Offer is assumed to complete on 31 December 2014 as follows:
●● TIX acquires 30% of outstanding ANI Units, on the basis TIX does not have the ability to control ANI, TIX will classify its investment in ANI as a financial asset fair valued through the profit and loss. The investment in ANI would be held at market value of ANI’s units traded on the ASX at record date.
●● TIX not deemed to control ANI as it only holds 30% of the issue units of ANI. Fife Funds remains as RE of ANI.
●● TIX investment in ANI would be held at market value of the units traded on the ASX at reporting date, assumed to be $2.66 per unit.
2. Acquiring 30% ownership interest in ANI has the following pro forma statement of financial position impacts for TIX (these notes relate to the preceding table):
i. Investment properties remain unchanged.
ii. Financial Assets at Fair Value increase to $69.1 million representing the fair value of ANI Units acquired by TIX. It is assume the value of the consideration paid is equivalent to the market value at 31 December 2014 assumed to be $2.66 per unit multiplied by 30% of ANI issued units acquired.
iii. Draw down of Debt Facility of $1.9 million to fund the payment of TIX’s consultant fees of $0.6 million and the cash component of the TIX Offer of $1.3 million. TIX’s interest bearing liabilities increase to $253.1 million.
iv. TIX’s issued equity increases by $68.5 million to $399.0 million, representing the value of additional TIX Units issued to ANI Unitholders in accordance with the TIX Offer net of equity raising costs for acquisition of 30% of ANI issued units.
v. Decrease in retained earnings of $1.3 million being the write-off of the cash component of the TIX Offer.
vi. TIX Units on issue increase to 150.9 million via the issue of an addition 26.0 million TIX Units for the acquisition of 30.0% of ANI in accordance with the TIX Offer.
vii. TIX Pro Forma Gearing is reduced to 41.3%.
viii. TIX Pro Forma NTA decreases to $1.91 per unit.
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Third Supplementary Bidder’s Statement 16
Pro forma operating Earnings and distribution per unit
The Combined Group’s pro forma Operating Earnings and distribution per unit for the year ending 30 June 2015 and 30 June 2016 as if the acquisition of ANI Units had taken place on 1 July 2014 and is based on different levels of ownership as follows:
●● TIX acquires 100% of ANI Units (100% Ownership Case);
●● TIX acquires 50.1% of ANI Units (50.1% Ownership Case); and
●● TIX acquires 30.0% of ANI Units (30% Ownership Case).
The tables below provide a summary of the stand-alone, Combined Group and ANI equivalent Operating Earnings and distributions per unit under each of these scenarios.
Pro Forma forecast operating Earnings and distribution per unit year ending 30 June 2015
FY15 guidance 100% ownership Case 50.1% ownership Case3 30% ownership Case
TIX Stand-
alone
ANI Stand-alone
Combined group
ANI Equivalent
(Scrip Ratio)1
Post reinvesting
Cash Payment2
Combined group
ANI Equivalent
(Scrip Ratio)1
Post reinvesting
Cash Payment2
Combined group
ANI Equivalent
(Scrip Ratio)1
(cpu) (cpu) (cpu) (cpu) (cpu) (cpu) (cpu) (cpu) (cpu) (cpu)
Pro Forma Operating Earnings
21.2 19.4 21.4 19.3 20.1 21.9 19.7 20.5 21.0 18.9
Distribution4 20.0 18.2 20.3 18.3 19.0 20.8 18.7 19.5 20.0 18.0
1 Represents Combined Group Operating Earnings and distribution per unit adjusted to reflect ANI Unitholder equivalent at scrip ratio of 0.90.
2 Cash Payment assumed to be reinvested in the Combined Group at $2.66 per Unit (based on the closing price of TIX Units on 19 March 2015 of $2.71 adjusted for the TIX March 2015 quarter distribution of 5.0662 cents per Unit). This equates to a forecast FY16 EPU and DPU yield of 8.04% and 7.62% respectively.
3 Includes 50% waiver of management fee due to 360 Capital Group in relation to the management of ANI, see section 6.4.
4 Distributions under the Combined Group are assumed to be equivalent to a 95% payout ratio.
Pro Forma forecast operating Earnings and distribution per unit year ending 30 June 2016
FY16 guidance 100% ownership Case 50.1% ownership Case3 30% ownership Case
TIX Stand-
alone
ANI Stand-alone
Combined group
ANI Equivalent
(Scrip Ratio)1
Post reinvesting
Cash Payment2
Combined group
ANI Equivalent
(Scrip Ratio)1
Post reinvesting
Cash Payment2
Combined group
ANI Equivalent
(Scrip Ratio)1
(cpu) (cpu) (cpu) (cpu) (cpu) (cpu) (cpu) (cpu) (cpu) (cpu)
Pro Forma Operating Earnings4
22.0 20.4 22.3 20.1 20.9 22.9 20.6 21.5 22.2 20.0
Distribution5 21.0 19.2 21.6 19.4 20.3 22.2 20.0 20.8 21.5 19.4
1 Represents Combined Group Operating Earnings and distribution per unit adjusted to reflect ANI Unitholder equivalent at scrip ratio of 0.90.
2 Cash Payment assumed to be reinvested in the Combined Group at $2.66 per Unit (based on the closing price of TIX Units on 19 March 2015 of $2.71 adjusted for the TIX March 2015 quarter distribution of 5.0662 cents per Unit). This equates to a forecast FY16 EPU and DPU yield of 8.38% and 8.11% respectively.
3 Includes 50% waiver of management fee due to 360 Capital Group in relation to the management of ANI, see section 6.4.
4 FY16 assumes the disposal of $47.3 million in non-core assets in March 2016 with the proceeds being used to repay debt.
5 Distributions under the Combined Group are assumed to be equivalent to a 97% payout ratio.
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Third Supplementary Bidder’s Statement 17
Sensitivity analysis
Sensitivities of the impact of the non-core asset disposals on the pro forma Combined Group and ANI Equivalent Operating Earnings per unit and pro forma gearing for each relevant ownership cases, for the year ending 30 June 2016, are shown below.
Sensitivity table impact of timing of non-core asset disposals impact on Combined group and ANI Equivalent forecast operating Earnings for year ending 30 June 20161
100% ownership Case 50.1% ownership Case
Combined group (cpu)
ANI Equivalent
(Scrip ratio) (cpu)
Post reinvesting
Cash Payment2
Combined group (cpu)
ANI Equivalent
(Scrip ratio) (cpu)
Post reinvesting
Cash Payment2
31 Dec 2015 22.1 19.9 20.7 22.7 20.5 21.3
31 Mar 2016 (Base Case) 22.3 20.1 20.9 22.9 20.6 21.5
30 Jun 2016 22.6 20.3 21.2 23.1 20.8 21.6
1 There is no 30% case as in this scenario as assumed 360 RE would not become the RE of ANI and hence be unable to implement its non-core asset disposal strategy.
Sensitivity table impact of non-core asset disposals impact on Combine group pro forma gearing as at 31 December 20141
Combined group Pro Forma gearing2 100% ownership Case 50.1% ownership Case
(%) (%)
Prior to Sale of Non-Core Assets 43.9% 43.2%
Post Sale of Non-Core Assets 40.8% 40.0%
1 There is no 30% case as in this scenario 360 RE would not become the RE of ANI and hence be unable to implement its non-core asset disposal strategy.
2 Based on Combined Group Pro Forma Statement of Financial Position as at 31 December 2014.
9 Notices of variationThe Bidder gives to you, in accordance with section 650D(1)(c), the following notices of variation in respect of the TIX Offer, in the following order:
(a) a notice of variation in respect of the increase of the TIX Offer set out in Attachment 1 to this Third Supplementary Bidder’s Statement; and
(b) a notice of variation in respect of the extension of the TIX Offer set out in Attachment 2 to this Third Supplementary Bidder’s Statement.
A copy of both notices was lodged with ASIC on 24 March 2015. Neither ASIC nor any of its officers takes any responsibility for the contents of the two notices.
10 ApprovalThis Third Supplementary Bidder’s Statement has been approved by a unanimous resolution of the directors of the Bidder.
Signed for and on behalf of the Bidder in accordance with section 351 of the Corporations Act.
David van AanholtIndependent Chairman360 Capital Investment Management Limited
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18 Third Supplementary Bidder’s Statement
Level 8, 56 Pitt Street Sydney NSW 2000 | GPO Box 5483, Sydney NSW 2001 Australia T +61 2 8405 8860 | Fax +61 2 9238 0354 | E [email protected] | W www.360capital.com.au 360 Capital Investment Management Limited ABN 38 133 363 185 AFSL 340 304 As responsible entity of the 360 Capital Industrial Fund ARSN 099 680 252
Corporations Act 2001 (Cth)
Section 650D(1)
Notice of variation of offers - Variation of TIX Offer
TO: Australian Securities & Investments Commission (ASIC)
Fife Capital Funds Limited in its capacity as responsible entity of Australian Industrial REIT (ANI)
AND TO: In accordance with ASIC Class Order 13/521, those persons listed on the ANI register as at 4 February 2015 and any other persons who have accepted the TIX Offer described in the replacement bidder's statement dated 13 February 2015 (as amended) (Bidder's Statement) by 360 Capital Investment Management Limited as responsible entity for the 360 Capital Industrial Fund (Bidder)
Unless otherwise specified, terms used in this notice have the same meaning as in the Bidder's Statement.
1. Variation
The Bidder gives notice under section 650D of the Corporations Act that it varies the TIX Offer such that ANI Unitholders who accept the TIX Offer and are entitled to receive the TIX Consideration will now receive for each ANI Unit (Increased Consideration):
(a) 0.90 TIX Units; and
(b) cash of 4.5 cents.
All ANI Unitholders who accept the TIX Offer (whether they have accepted the TIX Offer before or after the date of this notice) will be entitled to receive the benefit of the Increased Consideration, subject to the terms of the TIX Offer as amended below (including section 11.5.4 of the Bidder's Statement), should the TIX Offer be declared or become unconditional.
Pursuant to section 650D of the Corporations Act, the terms of the TIX Offer set out at section 11 of the Bidder's Statement are varied as follows to provide for the Increased Consideration:
(a) By replacing section 11.2.1 with the following:
"Subject to this section 11, the consideration offered under the TIX Offer for each of your ANI Units is 0.90 TIX Units and cash of 4.5 cents."
(b) By replacing section 11.2.3 with the following:
"Any fractional entitlements to TIX Units or cents will be rounded up to the nearest whole TIX Unit or cent (as applicable). If the Bidder reasonably believes that an ANI Unitholder's holding has been manipulated to take advantage of any rounding, then any fractional entitlement will be aggregated and rounded to the nearest whole number of TIX Units or cents (as applicable)."
Attachment 1 – Notice of variation for increase in TIX offerF
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19Third Supplementary Bidder’s Statement
Level 8, 56 Pitt Street Sydney NSW 2000 | GPO Box 5483, Sydney NSW 2001 Australia T +61 2 8405 8860 | Fax +61 2 9238 0354 | E [email protected] | W www.360capital.com.au 360 Capital Investment Management Limited ABN 38 133 363 185 AFSL 340 304 As responsible entity of the 360 Capital Industrial Fund ARSN 099 680 252
(c) By replacing 11.5.3 with the following:
"11.5.3 How consideration is provided
11.5.3.1 Obligation to issue TIX Units
Subject to section 11.5.4, the obligation of the Bidder to issue and allot any TIX Units to which you are entitled will be satisfied by the Bidder:
i. entering, or procuring that your name is entered, on the register of unitholders of TIX; and
ii. dispatching or procuring the dispatch to you by pre-paid post to your address recorded in the Bidder's copy of ANI's register of unitholders immediately before dispatch (or such other address as you may notify to Bidder in writing), a holding statement in your name in accordance with the ASX Listing Rules (for Issuer Sponsored Holdings) or a confirmation of issue in your name (for CHESS holdings). If your ANI Units are held in joint names, a holding statement or confirmation of issue will be issued in the name of, and despatched to, the holder whose name appears first in the Bidder's copy of ANI's register of unitholders.
11.5.3.2 How the cash consideration is paid
The Bidder will pay to you the cash component of the TIX Consideration for your ANI Units by cheque (or otherwise as agreed by the Bidder) in Australian currency. The cheque will be sent at your risk to you at your address shown on the latest copy of the register provided by ANI to the Bidder immediately prior to the preparation of the cheque, by pre-paid ordinary mail or, in the case of addresses outside Australia, by pre-paid airmail.
11.5.3.3 No interest
Under no circumstances will interest be paid on the cash component of the TIX Consideration payable under the TIX Offer, regardless of any delay in the remittance of the amount to you or any extension of the TIX Offer."
(d) By replacing the definition of "TIX Consideration" in section 12 with the following:
means the consideration which you are entitled to receive in accordance with the terms of the TIX Offer being, subject to the terms of the TIX Offer, 0.90 TIX Units and cash of 4.5 cents for every 1 of your ANI Units. As at the commencement of the Offer Period, the TIX Consideration does not include the Cash Payment and the Offer Terms do not include an obligation to pay, or procure the payment of, the Cash Payment. However if the Cash Payment Condition is satisfied, TIX will vary the TIX Consideration and the Offer Terms to include an obligation on TIX to pay or procure that 360 Capital pay the Cash Payment.
2. ASIC lodgement
A copy of this notice was lodged with ASIC on 24 March 2015. ASIC takes no responsibility for the contents of this notice.For
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20 Third Supplementary Bidder’s Statement
Level 8, 56 Pitt Street Sydney NSW 2000 | GPO Box 5483, Sydney NSW 2001 Australia T +61 2 8405 8860 | Fax +61 2 9238 0354 | E [email protected] | W www.360capital.com.au 360 Capital Investment Management Limited ABN 38 133 363 185 AFSL 340 304 As responsible entity of the 360 Capital Industrial Fund ARSN 099 680 252
3. Approval
In compliance with ASIC Class Order 13/521, this notice has been approved by a unanimous resolution passed by the directors of Bidder.
Signed by
David van Aanholt Independent Chairman 360 Capital Investment Management Limited
Date: 24 March 2015
ATTACHMENT 1 (CONTINUED)
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21Third Supplementary Bidder’s Statement
Level 8, 56 Pitt Street Sydney NSW 2000 | GPO Box 5483, Sydney NSW 2001 Australia T +61 2 8405 8860 | Fax +61 2 9238 0354 | E [email protected] | W www.360capital.com.au 360 Capital Investment Management Limited ABN 38 133 363 185 AFSL 340 304 As responsible entity of the 360 Capital Industrial Fund ARSN 099 680 252
Corporations Act 2001 (Cth)
Section 650D(1)
Notice of variation of offers - Extension of offer period
TO: Australian Securities & Investments Commission (ASIC)
Fife Capital Funds Limited in its capacity as responsible entity of Australian Industrial REIT (ANI)
AND TO:
In accordance with ASIC Class Order 13/521, those persons listed on the ANI register as at 4 February 2015 and any other persons who have accepted the TIX Offer
Reference is made to:
(a) the offers dated 17 February 2015 from 360 Capital Investment Management Limited as responsible entity for the 360 Capital Industrial Fund (Bidder) for all the units in ANI (TIX Offer); and
(b) the replacement bidder's statement dated 13 February 2015 in relation to the TIX Offer (Bidder's Statement).
Extension of offer period
Bidder hereby gives notice under section 650D(1) of the Corporations Act 2001 (Cth) that the TIX Offer is varied by extending the period during which the TIX Offer remains open for acceptance until 7:00pm (Sydney time) on Wednesday, 15 April 2015.
ASIC lodgement
A copy of this notice was lodged with ASIC on 24 March 2015. ASIC takes no responsibility for the contents of this notice.
Approval
In compliance with ASIC Class Order 13/521, this notice has been approved by a unanimous resolution passed by the directors of Bidder.
Signed by
David van Aanholt Independent Chairman 360 Capital Investment Management Limited
Date: 24 March 2015
Attachment 2 – Notice of variation for extension of offer PeriodF
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Bidder360 Capital Investment Management Limited in its capacity as responsible entity of the 360 Capital Industrial Fund Level 8, 56 Pitt Street Sydney NSW 2000Australiawww.360capital.com.au
Financial AdviserMoelis Australia Advisory Pty. Ltd. Level 27 Governor Phillip Tower1 Farrer PlaceSydney NSW 2000Australia
Australian Legal AdviserClayton Utz Level 15 1 Bligh StreetSydney NSW 2000Australia
TIX Offer Information LineIf you have any questions in relation to the TIX Offer or how to accept it, or if you have lost your Acceptance Form and require a replacement, please call the TIX Offer Information Line between 8.30am and 5.30pm (Sydney time) on Business Days:
Callers within Australia: 1800 247 697
Callers outside Australia: +61 2 8024 1189
Share registry for the TIX OfferYou can contact the share registry, Boardroom Pty Limited, at the addresses set out below:
Postal address Boardroom Pty LimitedTIX OfferGPO Box 3993Sydney NSW 2001Australia
Hand delivery Boardroom Pty LimitedTIX OfferLevel 7, 207 Kent StreetSydney NSW 2000Australia
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