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

Mirvac's capital under management will lift by 76% on the win.

| More on:
A group of businesspeople clapping.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The AMP share price could be a major mover on Tuesday after the company lost control of the AMP Capital Wholesale Office Fund (AWOF)
  • The fund's investors voted for Mirvac to take the reins in a move that will see the property group's capital under management leap 76% 
  • AMP's loss means Dexus will pay a maximum of $325 million for the Collimate Capital domestic infrastructure and real estate business

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.

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.

More on Financial Shares

Two smiling work colleagues discuss an investment or business plan at their office.
Financial Shares

What this top broker is saying about IAG shares

IAG shares are trading close to their four-year highs.

Read more »

Woman and man calculating a dividend yield.
Financial Shares

Here is the dividend forecast to 2026 for AMP shares

AMP could be a viable source of dividends. But how much will it pay?

Read more »

Keyboard button with the word sell on it.
Financial Shares

Why Goldman Sachs just slapped a sell rating on this ASX 200 stock

This blue chip has been hit with a sell rating. But why?

Read more »

Accountant woman counting an Australian money and using calculator for calculating dividend yield.
Financial Shares

If you'd invested $10,000 in Netwealth shares at the start of the year, here's how much you'd have now

Would it have been a good idea to buy Netwealth shares on 2 January?

Read more »

Australian notes and coins symbolising dividends.
Financial Shares

Why is the Macquarie share price getting hammered on Monday?

Investors shouldn't be worried about today's big share price drop...

Read more »

Happy man holding Australian dollar notes, representing dividends.
Financial Shares

What could $10,000 invested in QBE shares be worth in 12 months?

Would it be a good idea to buy this insurance giant's shares? Let's find out.

Read more »

A man looking at his laptop and thinking.
Financial Shares

Here is the earnings forecast out to 2026 for IAG shares

A leading broker has revealed where it thinks profit is headed in the next few years.

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Financial Shares

The QBE share price is marching higher on Friday. Here's why

ASX 200 investors are bidding up the QBE share price on Friday. But why?

Read more »