Here’s why the Centuria (ASX:CNI) share price is gaining

There were two announcements from the real estate funds management company today.

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Centuria Capital Group (ASX: CNI) has had a busy day today, having announced that its takeover of Primewest Group Ltd (ASX: PWG) is now unconditional and its unlisted fund is undertaking Australia’s largest single asset capital raise in 15 years.

At the time of writing, the Centuria share price is $2.73 ­– 1.49% higher than yesterday’s close.

Let’s take a closer look at today’s news out of the real estate funds management company.

Primewest takeover bid

Centuria launched an off-market takeover bid for fellow real estate funds management company Primewest on 19 April.

Today, it announced that the takeover is now wholly unconditional and the merger process will begin later this month, having been pushed back by a week.

The takeover will see Primewest shareholders receiving $1.51 per share, made up of 20 cents in cash and 0.473 Centuria shares. The value of the shares is based on the Centuria share price as of 16 April.

Australia’s largest single asset capital raise in 15 years

In other news from Centuria today, the company’s unlisted Centuria Government Income Property Fund (CGIPF) is undertaking a $133 million capital raise.

The cash will go towards the purchase of a high rise building in Melbourne’s Footscray.

The fund will spend a total of $224 million for the 14-storey office building.

The entire building is currently leased, mostly to Victorian Government departments and agencies.

Centuria’s joint CEO Jason Huljich commented on the CGIPF’s capital raise:

Centuria has a 22-year track record for delivering successful fixed-term unlisted funds. This will be our largest capital raise to date for a single asset unlisted fund with a target of approximately $133 million.  

With rising white-collar employment and workforces increasingly returning to the office, we believe office asset investments will increasingly deliver strong results. Already within the past few months, we’ve witnessed several large office transactions in the domestic market.

Centuria share price snapshot

Today’s gains have given the Centuria share price a boost.

Currently, the Centuria share price is up 5.4% in 2021. It has also gained 35.1% since this time last year.

The company has a market capitalisation of about $2 billion, which will soon increase when it merges with Primewest, which is valued at around $590 million.

Centuria has approximately 740 million shares on issue.  

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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 Bruce Jackson.

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