Australia’s listed property company Charter Hall is looking to buy infrastructure specialist Hastings Funds Management.
The AUD19bn real estate group has begun exploratory discussions to buy Hastings from Westpac Banking Group, one of Australia’s big four banks.
Westpac, which has owned Hastings since 2003, is reportedly seeking up to AUD500m (€336 million) for the sale.
An industry source told IPE Real Estate that the discussions are at a very early stage but indicated that Charter Hall is interested in expanding its fund management business to include infrastructure.
Charter Hall declined to comment.
Westpac first offered Hastings for sale more than a year ago, when it appointed US-based advisers Berkshire Capital to run the sale process.
An established infrastructure investor told IPE Real Estate: “I know that Westpac has re-instigated the sale of Hastings after a failed attempt 12 months ago.
“I know the sale process is under way again.”
When asked for his views on Charter Hall Group as a potential owner of Hastings, the source said: “Charter Hall is a publicly listed company which would rightly focus on optimising returns to shareholders.
“So if Charter Hall were to acquire the asset, some major investors in Hastings may be concerned about the motivation of the new owner – and the potential impact on them as investors.”
Previous talks with potential buyers were abandoned last year.
At the time, it was reported that Westpac was seeking between AUD300m and AUD500m for the business, which manages global and Australian infrastructure assets valued at almost AUD13bn, weighted towards ports, airports and regulated utilities.
Parties expressing early interest included north American financial services groups TIAA and MassMutual.
China Merchants Group, a joint venture partner with Hastings in the 2014 acquisition of Port of Newcastle for AUD1.75bn, had also been linked with a potential buyout.
Hastings’ most notable investment was the AUD10.3bn purchase in 2015 of a 99-year-lease to operate TransGrid, a high-voltage electricity network in New South Wales.
Hastings led the winning consortium which included the Australian-listed Spark Infrastructure, Canada’s Caisse de dépôt et placement du Québec, Tawreed Investments (a subsidiary of the Abu Dhabi Investment Authority), and Wren House Infrastructure Management, also from the Middle East.
Another source said: “Many of Hastings’ clients are Australian industry super funds, and they are watching [the sale] very closely and carefully.”
The clients are “quite concerned”, he said, over the instability the Hastings business is going through. These concerns have been compounded by a spate of resignation of key executives in the past year.
Among those to leave Hastings are: James Fraser-Smith, who has joined Australia’s Future Fund; Richard Hoskins, who this month became the managing director for global infrastructure at the Carlyle Group; Peter Taylor, who is now the co-head of the Carlyle Global Infrastructure Opportunities Fund.
