New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Augusta Capital</h2>
Takeover Offer received
Augusta Capital&nbsp;(AUG) has this afternoon received a full takeover offer from Centuria Capital (ASX:CNI). Upon first glance, the core components of the offer remain the same as what was outlined in the takeover notice announcement on 15 June 2020 (see attached report).
Key points from the announcement
<ul>
<li>The offer consideration consists of NZ$0.20 per AUG share and 0.392 CNI shares per AUG share. Due to a lower CNI share price the current value of the takeover offer is NZ$0.95/share and below the NZ$1.00/share implied offer price in the Offer Document (see Figure 1 for implied live pricing).</li>
<li>The offer is supported by 19.5% of AUG shareholders (including Mark Francis and Bryce Barnett), which in combination with CNI’s 23.3% shareholding represents 42.8% of AUG’s total shares on issue.</li>
<li>The offer is open for acceptance from 29 June and remains open until the offer becomes unconditional with 90% acceptance reached or 11.59pm on 10 August 2020 (unless extended).</li>
<li>The offer is not subject to OIO approval as CNI has already obtained consent.</li>
<li>The offer is conditional on a material adverse effect clause (among other conditions – see section 7 of the Offer Document).</li>
</ul>
For more information, refer to the takeover offer&nbsp;<a href="https://www.augustatakeover.co.nz/offer/home/" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://www.augustatakeover.co.nz/offer/home/&amp;source=gmail&amp;ust=1593507125467000&amp;usg=AFQjCNFxCV64ArYgDgFG6yG6T57xA0MkxQ" rel="noopener">website</a>.
What’s next from here?
AUG will release a target company statement which will outline its directors recommendation and an independent adviser's report on the merits of the offer within 14 days. With the information we have, the implied offer price of NZ$1.00 values the funds management business at 5.0% of assets under management or 4.5% based on the current offer value of NZ$0.95. This compares to (1) a median EV/FUM of 3.8% for recent ANZ transactions, (2) previous CNI acquisitions of Heathley and 360 Capital at EV/FUM 5.5% and 6.6% respectively, and (3) our spot NAV of NZ$0.91 which capitalises AUGs AUM at 4.0%. We await further information to be provided with the independent advisors report.
Figure 1:&nbsp;Calculation of live implied offer value (as at 6.10pm NZT, 29 June 2020)
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 189pt;">
CNI share price as at 29/6 (AUD)
</td>
<td style="width: 71pt;">
1.7800
</td>
</tr>
<tr>
<td style="width: 189pt;">
AUD/NZD as at 29/6
</td>
<td style="width: 71pt;">
1.0693
</td>
</tr>
<tr>
<td style="width: 189pt;">
CNI share price (NZD)
</td>
<td style="width: 71pt;">
1.9034
</td>
</tr>
<tr>
<td style="width: 189pt;">
Scrip ratio
</td>
<td style="width: 71pt;">
0.392
</td>
</tr>
<tr>
<td style="width: 189pt;">
Value of CNI consideration (NZD)
</td>
<td style="width: 71pt;">
0.7461
</td>
</tr>
<tr>
<td style="width: 189pt;">
Plus NZ$0.20 per AUG share
</td>
<td style="width: 71pt;">
0.200
</td>
</tr>
<tr>
<td style="width: 189pt;">
Current offer value (NZD)
</td>
<td style="width: 71pt;">
0.9461
</td>
</tr>
<tr>
<td style="width: 189pt;">
Augusta share price (NZD, as at 29/6)
</td>
<td style="width: 71pt;">
0.8700
</td>
</tr>
<tr>
<td style="width: 189pt;">
Upside to offer
</td>
<td style="width: 71pt;">
8.75%
</td>
</tr>
</tbody>
</table>
Rohan Koreman-Smit&nbsp; Senior Analyst, Equities Forsyth Barr Limited
P: +64 9 368 0085 | TF: 0800 367 227&nbsp; Level 23, Lumley Centre, 88 Shortland Street, Auckland

Augusta Capital
Takeover Offer received
Augusta Capital&nbsp;(AUG) has this afternoon received a full takeover offer from Centuria Capital (ASX:CNI). Upon first glance, the core components of the offer remain the same as what was outlined in the takeover notice announcement on 15 June 2020 (see attached report).
Key points from the announcement

The offer consideration consists of NZ$0.20 per AUG share and 0.392 CNI shares per AUG share. Due to a lower CNI share price the current value of the takeover offer is NZ$0.95/share and below the NZ$1.00/share implied offer price in the Offer Document (see Figure 1 for implied live pricing).
The offer is supported by 19.5% of AUG shareholders (including Mark Francis and Bryce Barnett), which in combination with CNI’s 23.3% shareholding represents 42.8% of AUG’s total shares on issue.
The offer is open for acceptance from 29 June and remains open until the offer becomes unconditional with 90% acceptance reached or 11.59pm on 10 August 2020 (unless extended).
The offer is not subject to OIO approval as CNI has already obtained consent.
The offer is conditional on a material adverse effect clause (among other conditions – see section 7 of the Offer Document).

For more information, refer to the takeover offer&nbsp;website.
What’s next from here?
AUG will release a target company statement which will outline its directors recommendation and an independent adviser's report on the merits of the offer within 14 days. With the information we have, the implied offer price of NZ$1.00 values the funds management business at 5.0% of assets under management or 4.5% based on the current offer value of NZ$0.95. This compares to (1) a median EV/FUM of 3.8% for recent ANZ transactions, (2) previous CNI acquisitions of Heathley and 360 Capital at EV/FUM 5.5% and 6.6% respectively, and (3) our spot NAV of NZ$0.91 which capitalises AUGs AUM at 4.0%. We await further information to be provided with the independent advisors report.
Figure 1:&nbsp;Calculation of live implied offer value (as at 6.10pm NZT, 29 June 2020)




CNI share price as at 29/6 (AUD)


1.7800




AUD/NZD as at 29/6


1.0693




CNI share price (NZD)


1.9034




Scrip ratio


0.392




Value of CNI consideration (NZD)


0.7461




Plus NZ$0.20 per AUG share


0.200




Current offer value (NZD)


0.9461




Augusta share price (NZD, as at 29/6)


0.8700




Upside to offer


8.75%




Rohan Koreman-Smit&nbsp; Senior Analyst, Equities Forsyth Barr Limited
P: +64 9 368 0085 | TF: 0800 367 227&nbsp; Level 23, Lumley Centre, 88 Shortland Street, Auckland

Augusta Capital

Augusta Capital: Takeover Offer Received