MULTIPLEX STATEMENT TO THE AUSTRALIAN STOCK EXCHANGE
18 May 2006
UPDATE ON PLANNED RATIONALISATION OF UK PORTFOLIO
Multiplex Group is pleased to announce that it has been agreed to sell to Aldersgate a number of interests previously held within R&M Investments for £68.25 million (approximately A$166 million). R&M Investments was the original bidding vehicle for Multiplex and Aldersgate’s joint investment in Duelguide PLC in the United Kingdom. This transaction is consistent with the strategy outlined for the Group’s UK portfolio, most recently communicated at the interim results in February 2006.
Multiplex Developments UK Chief Executive Jayne McGivern said this sale agreement followed a comprehensive review by Multiplex of the UK development portfolio, allowing the business to concentrate on select core opportunities.
“The agreement leaves the development business in the United Kingdom in a strengthened position through the release of equity that can be applied to those development opportunities which remain,” Ms McGivern said.
The agreement provides for Aldersgate or entities associated with Aldersgate to acquire the Group’s interests in the assets nominated below, subject to conditions including the ultimate restructure of Duelguide and the consent, if necessary, of various third parties:
- a 45% interest in the Sapphire Retail Fund
- a 50% interest in R&M Funds Management Ltd (the Manager of the Sapphire Retail Fund)
- a 25% interest in Rushmere Shopping Centre, Northern Ireland
- a 25% interest in Paddington development site, Central London
- a 25% interest in St Enochs development site, Glasgow
- an 8.5% interest in Stockley Park, West London
The decision to sell interests in the Sapphire Retail Fund and its management company reflects strong investor appetite for this type of property investment and the Group’s desire to pursue a UK funds management business in its own right, rather than in joint venture.
Total consideration for the transaction exceeds book value; however, the profit is not sufficiently material to alter existing guidance for the current financial year.
“This transaction allows the Group to focus its efforts on a select number of key projects and concentrate on value creation for securityholders,” Ms McGivern said.
REMAINING MULTIPLEX UK PORTFOLIO
Following the conclusion of this transaction today, Multiplex will retain a portfolio of UK development opportunities comprising interests in the following projects:
- Eden, High Wycombe (including the Octagon Centre), South East England
- Union Square, Aberdeen, Scotland
- Newcastle City Centre, Newcastle, North East England
- Stamfordham Road Retail Park, Newcastle, North East England
- Mereham regeneration scheme, Cambridge Shire, South East England
- Cricklewood urban regeneration scheme, North London
- Castle House, Elephant & Castle, London
- West Cromwell Road, London
Eden, High Wycombe, a A$600 million Regional Shopping Centre redevelopment is the most advanced of these projects and currently well advanced in the construction phase.
Fully developed, the value of the remaining UK portfolio together with a 50% interest in a mixed use scheme in Gibraltar is approximately A$6.5 billion (refer December 2005 Portfolio Report). This represents a strong platform which will continue to provide opportunities to extract value through the integrated property model in the United Kingdom. It is likely that the composition of development opportunities will change over time as projects are sold at various stages of their life cycle and as new projects enter the pipeline.
Ms McGivern said: “We look forward to progressing these opportunities and to demonstrating our delivery capability.”
Multiplex Group stapled securities trade on the Australian Stock Exchange under the symbol “MXG”.