Vital Trust deal off the table

Vital Healthcare Property Trust’s manager says it won’t proceed with the Healthscope purchase and the manager’s chief executive, David Carr, has resigned.

Carr will be replaced by Miles Wentworth who managed the NZX-listed Vital when it was called Calan Healthcare Properties Trust for 10 years until 2006.

It also appears that the manager, Canadabased NorthWest Healthcare Property Real Estate Investment Trust, won’t charge Vital the $3 million fees it previously said it would keep if Vital didn’t participate in the Healthscope purchase.

These decisions vindicate the stance of three dissident institutional investors, ANZ Investment Funds, Mint Asset Management and ACC, which together own 10 per cent of Vital’s units.

In early February, NorthWest agreed to pay A$1.258 billion for 11 freehold hospital properties from ASX-listed Healthscope, conditional on fellow Canadian company Brookfields successfully taking over Healthscope. NorthWest owns nearly 25 percent of Vital’s units.

The already highly geared Vital would have also had to raise fresh capital if it was going to participate in the Healthscope purchase.

“Unfortunately, despite the board’s collective view earlier in calendar 2018 that the Healthscope real estate opportunity was in line with Vital’s strategy, we were unable to see that the opportunity met all the overall investment objectives for the trust,” said the two independent directors on the board of the NorthWest subsidiary that manages Vital, Graham Stuart and Andrew Evans, in a statement.

“Further, management and directors have also listened carefully to a range of investor feedback over the last few weeks and it has factored heavily into our conclusion.” they said.