PEXA heads towards A$1.6m trade sale

Bernard Kellerman M&A
Marcus Price, PEXA CEO
Marcus Price, PEXA CEO

An offer by a consortium to acquire Property Exchange Australia (known as PEXA) has been accepted by sufficient shareholdings to deliver more than 50 per cent of the company’s issued capital.

PEXA was on a dual track path to either IPO or trade sale until 5 November, when the consortium of Link Group, Morgan Stanley Infrastructure Inc and Commonwealth Bank of Australia increased the offer it had made on 8 October.

Coupled with the existing shareholdings of Link and CBA, the acceptances as at 8pm AEST on 5 November represented a majority interest in PEXA of 55.4 per cent, which was enough for the transaction to proceed.

The price agreed with the consortium represents an implied enterprise value for PEXA of at least A$1.5 billion. This can potentially increase to $1.6 billion, depending on the level of final acceptances for the trade sale offer received by PEXA’s shareholders.

PEXA spokesman Brett Clegg said anyone acquiring 75 per cent of PEXA could move to full ownership. The other shareholders will be making their own decisions on whether to sell to the consortium, he said.

CBA had previously owned 13.1 per cent. The transaction, if it does move to completion, will lift CBA’s holding to 16 per cent.

The bank said, in a note to the ASX, that the transaction “aligns with [its] strategy to focus on its core banking businesses and to create a simpler, better bank for our customers.”

As part of the transaction, CBA will invest a further $50 million, bringing its total investment in PEXA to date to approximately $100 million.

Banking Day understands the other major banks, which had much smaller investments in PEXA than CBA, have already sold their respective holdings to the consortium.  

Among the other shareholders yet to decide whether to sell are Macquarie Bank – which once owned 25 per cent of PEXA – along with real estate rich lister Paul Little and the Victorian Government, Banking Day understands.

PEXA said completion “remains subject to a range of conditions”. It said  the transaction was expected to close before the end of the calendar year.

The network was founded in 2010 as part of the Council of Australian Governments’ push to deliver a single national electronic system for the settlement and lodgement of property transactions.  

PEXA now comprises over 150 financial institutions and more than 6,500 practitioner firms. CEO Marcus Price said the network now accounts for more than half of all property settlements nationwide.