Charter Hall Group has entered into exclusive discussions to acquire the leading Australian infrastructure manager Hastings Funds Management from its parent company, Westpac Bank.
A joint statement from Charter Hall and Westpac, lodged with the Australian Securities Exchange today, confirmed market speculation surrounding Charter Hall’s interest in in the infrastructure specialist.
Previous media reports suggested that Westpac was seeking up to AUD500m (€339m) for Hastings, but market observers believe a sale is more likely to be priced between AUD250m and AUD360m. The statement did not confirm a price.
Hastings has been on the market for 18 months, with various parties – including TIAA CREF and MassMutual Financial Group – among those to have expressed an interest.
Observers said these negotiations failed because of the asking price for the infrastructure manager, which has lost a number of key executives in recent months.
Hastings has operated for more than 22 years. It is headquartered in Australia, with offices in Melbourne, Sydney, London, New York, Singapore, and Seoul. Its 100 staff are responsible for roughly AUD14.3bn.
Charter Hall Group, manager of approximately AUD19bn in prime Australian real estate, said in the joint statement that it believed the proposed sale provided an attractive expansion opportunity for the company across real assets.
Any binding arrangements in relation to the proposed transaction were subject to completion of due diligence and regulatory and board approvals, the statement said.
The parties declined to comment further, but said a further update would be provided following the outcome of negotiations.
In a research note on the potential Hastings acquisition, Macquarie Securities said a deal would be a “company-transforming” transaction for Charter Hall, and potentially accretive to its earnings.
Macquarie added: “We see the merit in Charter Hall extending its significant domestic and international property investor relationship and retail distribution channels into new infrastructure opportunities.”
