The $22 billion planned merger between Novion Property and Federation Centres, which will create the second largest retail real estate investment trust in the country, is expected to be approved without a hitch.
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Approval will also bring the full reincarnation of the former Centro Properties, which was the foundation for Federation.
Under the merger scheme, Novion shareholders must vote in Sydney in Wednesday to accept a scrip offer from Federation, where each Novion security will be exchanged for 0.8225 Federation securities, which implies a Novion value of $2.55 per security
In all, the merged entity will have $18.2 billion in annual retail sales, assets under management of $22 billion and a listed market value of $11 billion.
The merged group will own and manage 102 malls, including Melbourne's Chadstone, Emporium and The Glen, and Chatswood in Sydney. There will also be a large exposure to food-based centres, which have been the growth engine of the retail sector in the past two years.
Last week the Australian Competition and Consumer Commission said it would not oppose the deal but added that either Federation's Karingal Hub or Novion's Bayside Shopping Centre in suburban Melbourne would need to be sold.
Federation's chief executive, Steven Sewell, is to assume the same role in the new entity.
The potential merger comes as speculation mounts that DEXUS will likely make a tilt for the Investa property platform being sold by Morgan Stanley, possibly in a deal with Brisbane-based Cromwell Corp.
Under such a scheme, the property assets of Investa are being sold, which would be of interest to DEXUS, but the management of the Investa Office Fund would be attractive to Cromwell.
There are also suggestions a private equity group is interested in unison with Mirvac.
Meanwhile, investors are also keeping a close eye on the share price movements of the Woolworths' spin-off, Shopping Centres Australasia Property, amid market speculation it is in the sights of Charter Hall Retail REIT.
