Investore Property is seeking money from investors so it can fund the $140.8 million purchase of three big retail stores from its manager Stride Property.
Stride spun out Investore in 2016 and retains a 20 per cent stake in the specialist retail property owner which it continues to manage.
The companies said they have reached a conditional agreement for the sale of two Auckland properties and the Bay Central Shopping Centre in Tauranga.
The Auckland properties are Bunnings Mt Roskill and Mt Wellington Shopping Centre, which has Countdown as an anchor tenant.
As a related transaction, Investore shareholders excluding Stride will be asked to vote on the deal, which isn't expected to settle before April.
Investore says the acquisition and the accompanying share offer will increase distributable profit per share by about 2.5 per cent. Its guidance of 7.6 cents per share cash dividend for the financial year 2020 remains unchanged.
To fund the purchase, Investore wants to raise $80m, comprising a $65m underwritten placement, and a retail offer for up to $15m. It will accept over-subscriptions of up to another $5m.
Stride will buy enough shares to retain its 19.9 per cent holding in the company, with the shares to be priced at $1.75, a 7.5 per cent discount from its last closing price of $1.89.
Investore says the proceeds of the offer will pay down debt ahead of the acquisition, reducing its loan to value ratio to 30.2 per cent, but that will return to around current levels afterwards. Its loan to value ratio at September 30 was 40.6 per cent.
The retail offer opens on November 25.
Trading of Investore shares was halted for the placement's bookbuild process, while Stride shares decreased 0.5 per cent to $2.22.