Charter Hall Group has signed a scheme implementation agreement to acquire real estate funds manager Folkestone in a cash deal worth A$205m ($150.5m).
As per the agreed terms of the deal, shareholders of Folkestone will be entitled to receive A$1.39 cash per share.
Folkestone shareholders will also be entitled to a A$0.03 per share ordinary dividend for fiscal 2018, which will be paid on 27 September 2018.
The dividend will be payable even if the scheme fails to secure approval, the companies said in a joint statement.
Charter Hall expects the deal to increase its funds under management by A$1.6bn.
The Folkestone board has unanimously recommended its shareholders to vote in favour of the takeover.
The deal is expected to close in November this year, subject to regulatory approvals. The transaction will be financed using existing cash reserves.
Charter Hall managing director and group CEO David Harrison said: “We see the Folkestone business model as consistent with our existing strategy. We are attracted to their leading position in the social infrastructure sector and the suite of listed and unlisted funds adds to our diversity of sources of equity, whilst their origination capability is expected to generate property investments for the expanded list of managed funds.”
Folkestone managing director Greg Paramor AO added: “We see this as an excellent fit of two likeminded businesses. Folkestone brings significant expertise and skills in the fields of social infrastructure and early learning.
“Folkestone’s other existing unlisted funds also complement Charter Hall’s existing platform, providing opportunities for Charter Hall to either grow these funds, or create new fund initiatives leveraging Folkestone’s extensive private client network and Charter Hall’s extensive distribution network.”