Australian Unity plans to purchase Westpac Funds Management Limited (WFML) 

20 September, 2010

Westpac announced today that Australian Unity plans to purchase Westpac Funds Management Limited (WFML), the responsible entity of the Westpac Diversified Property Fund (WDPF).

The transaction is expected to be completed on 30 September, 2010 and follows a strategic review by Westpac of its property funds management business.
After completion of the transaction, Australian Unity Investments (AUI) will own the responsible entity for the Fund and all existing unitholders will retain their investment in the Fund, which will be renamed the Australian Unity Diversified Property Fund.

David Bryant, head of AUI, said that the acquisition fits with AUI’s defined strategy to grow its longestablished and successful property asset management business.

“The Diversified Property Fund will expand our property portfolio, diversify the product range we offer investors, and give us increased scale in the property sector, bringing our property funds under management to approximately $1.7 billion,” he said.

The proposal from AUI will provide a number of significant benefits for unitholders, Mr Bryant said.

“Our intention is to continue to provide unitholders with consistent income as well as the potential for capital growth and to return a measure of liquidity to the Fund through patient asset and capital management,” Mr Bryant said.

Among its undertakings, AUI has agreed to:

• establish liquidity in the Fund via a series of three $10m withdrawal offers during 2010/2011;
• recapitalise the Fund via a $40m entitlement offer, giving eligible unitholders the opportunity to further invest in the Fund at a discount to Net Tangible Assets; and
• underwrite $10m of the entitlement offer.

AUI is also seeking to extend the term of WDPF’s debt facility from May 2011 to September 2013 and has confirmed it has received credit approved term sheets from the Fund’s banking syndicate.

AUI plans to acquire Westpac’s unit holding in the Fund, thereby creating alignment between Australian Unity and unitholders.

Westpac took into account Australian Unity's track record as a property fund manager and the proposed extension of the debt facility term, as well as Australian Unity’s plans for the fund.

Rob Whitfield, Group Executive, Westpac Institutional Bank, said the transaction should prove attractive to unitholders given the opportunity for liquidity and lower refinancing risk for the Fund.

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