Photo: 123RF
Vital Healthcare's management is going in-house, with a $220 million capital raising to fund the change and position the property trust for near-term development projects.
The parties had reached a conditional agreement to buy out the external managers, Northwest, which had a long-term agreement to manage the trust's hospitals and medical facilities property portfolio.
"Internalisation marks an important milestone for Vital, positioning the business to deliver stronger and more sustainable returns for Unit Holders," Vital chair Graham Stuart said, adding 35 of the current external Northwest management team of 45 would be retained in the internal structure.
"By bringing management in-house under a strengthened governance framework, Vital will be well-positioned to unlock future growth, enhance transparency and accountability, and fully align management and investor interests."
Stuart said the trust was the last of the NZX public listed companies with a external manager.
"Most investors now prefer internalised funds, and we're the last one on the NZX to go down this track," he said.
"It's a good deal for unit holders. We're essentially paying 8.5 half times the savings that we'll be making from this, which is pretty competitive with recent internalisations.
The headline payout to Northwest was $214m, though was expected to drop to $177m after tax.
The balance would be used to advance projects that had been sitting on the books for a few years, during the property market downturn, including including Queensland-based Coomera Stage 1A and Sydney-based Macarthur Stage 2.
"We've got enough tailwind now, from the macro economics to revitalize those projects. So over the next three months, we'll through the finalizing stage and put those through the board. Both them offer attractive returns to unit holders, so we're quite excited to get those up and going."
The capital will be raised by way of a $190m underwritten placement of units and a $30m unit purchase plan at a fixed price of $1.95 a unit.
The price per unit represented a 9.5 percent discount to the dividend-adjusted unit closing price of $2.156 on 7 November 2025.
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