AMP inks $550 million deal with Dexus

The property trust will snap up Collimate Capital, confirming weeks of speculation

AMP inks $550 million deal with Dexus

AMP has definitively closed the book on its plan to spin off Collimate Capital, its real estate and infrastructure equities manager, instead selling the unit, as expected, to property trust Dexus in a deal worth up to $550 million.

AMP announced on Wednesday that it had reached an agreement to sell the majority of Collimate’s business to Dexus. However, AMP will continue to negotiate with buyers for its remaining offshore operations, according to a report by The Sydney Morning Herald. The agreement confirms weeks of rumours that Dexus would snap up the unit.

Discussions with potential buyers for Collimate’s international infrastructure business will continue “after receiving a number of approaches from parties interested in acquiring the business,” AMP said.

AMP’s deal with Dexus includes an upfront cash payment of $250 million and an earn-out consideration of up to $300 million, depending on the size of the local $27.9 million investor pool that transitions to the Dexus platform, the Herald reported. The pool includes $18.2 billion in real estate and $9.7 billion in domestic infrastructure equity.

AMP rebranded the $44 billion funds management platform to Collimate Capital in anticipation of a planned demerger and separate listing on the ASX. In light of the deal with Dexus, that is no longer on the cards, the Herald reported.

Debra Hazelton, AMP chair, said the sale was “a strong outcome for AMP shareholders and Collimate Capital stakeholders.”

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“As we work towards completing the transaction, a key priority for our board will be returning capital to AMP shareholders in acknowledgement of their patience as we have pursued options to maximise value for them,” she said.

As part of the deal, Dexus will also acquire Collimate’s equity stakes in various funds, including units in the AMP Capital Wholesale Office FInd, worth up to $450 million, the Herald reported.

Dexus CEO Darren Steinberg said he was “reasonably confident” that investors in the platform would make the switch to Dexus.

“I’m comfortable that with the existing teams, with the platform stability we give them, and the focus on investor performance, that we will keep a lot of the capital that’s there,” he said.