AMP share price in focus as Mirvac wins control of $7.7 billion office fund

A group of business people face the camera clapping after investors voted to give Mirvac control of an AMP office fund which will likely move the AMP share price todayA group of business people face the camera clapping after investors voted to give Mirvac control of an AMP office fund which will likely move the AMP share price today

The AMP Ltd (ASX: AMP) share price is on watch this morning after AMP Capital Wholesale Office Fund (AWOF) investors voted to appoint Mirvac Group (ASX: MGR) as trustee.

Losing control of the fund also puts focus on the sale of AMP’s real estate and domestic infrastructure business to Dexus Property Group (ASX: DXS).

The AMP share price was $1.02 at Monday’s market close.

Let’s take a closer look at today’s news from the embattled ASX financial services company.

AMP loses control of AWOF to Mirvac

The AMP share price could be one to watch on Tuesday after the company lost control of a $7.7 billion office fund to fellow S&P/ASX 200 Index (ASX: XJO) constituent, Mirvac.

AWOF is made up of 11 assets concentrated in the Sydney and Melbourne markets. Among its holdings are Sydney’s Quay Quarter Tower and Melbourne’s Collins Place.  

But losing Monday’s vote for control of the fund – as well as a separate $3 billion investment mandate – sees AMP foregoing more than a handful of prestigious assets.

The maximum earnout payable under the sale of Collimate Capital’s domestic leg to Dexus has fallen to around $75 million on today’s news.

The highest price Dexus will pay for the business is now just $325 million, including a $250 upfront cash payment.

Though, AMP previously noted it didn’t expect to receive most of what was a potential $300 million earnout fee.

Mirvac is set to take control of AWOF in mid-October. The property group’s capital under management will surge around 76% to approximately $18.1 billion on the back of the win.

However, the required majority of the fund’s investors didn’t vote to effect a liquidity facility. Mirvac plans to put forward amendments to offer $500 million of liquidity within 20 days of taking control.

AMP has been battling to keep control of the office fund since last year. Mirvac reportedly emerged as a contender for AWOF in September.

AMP won a November vote for the fund’s reins before certain AWOF investors called for yesterday’s vote in May.

The post AMP share price in focus as Mirvac wins control of $7.7 billion office fund appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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