MELBOURNE, Australia--Charter Hall Group (CHC.AU) has broken off talks to buy Westpac Banking Corp.'s(WBC.AU) Hastings Management unit, a global infrastructure-assets business with about 14.3 billion Australian dollars (US$11.3 billion) in funds under management.
In a one-sentence statement Thursday, Charter Hall said it had elected not to proceed with further due diligence on the proposed acquisition. Westpac confirmed discussions with Charter Hall had ceased.
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The companies disclosed last month they were in exclusive talks on a potential deal, subject to the commercial property investor going over Hastings' books, as well as regulatory and board approvals. No financial details were disclosed.
Westpac said it would continue to assess sale options, and remained committed to Hastings' clients and the business.
Goldman Sachs had estimated the business could fetch as much as A$520 million, based on similar historical deals.
Although Hastings is a relatively small business within Westpac, a disposal would have helped the bank build capital at a time when industry regulators have called for lenders to build their capital buffers against the risk of future crises. Morgan Stanley estimated Hastings accounts for less than 0.5% of Westpac's overall earnings.
Hastings invests on behalf of institutional investors in a broad range of infrastructure equity and debt, including interests in owners of airports including toll roads, airports including Melbourne Airport, seaports such as Port of Newcastle in eastern Australia and Northern Ireland gas distribution company Phoenix Natural Gas.
In February, Hastings bought the outstanding 50% stake in British utility South East Water on behalf of clients including investors within Canada's Desjardins Group. A month later it agreed a secured a debt-investment agreement with Development Bank of Japan Inc. and its DBJ Asset Management Co. arm to target investments in Organisation for Economic Cooperation and Development countries.
Founded in Melbourne in 1994, Hastings now also has offices in Sydney, London, New York, Singapore and Seoul. Westpac bought 51% of the company in October 2002 and the remaining 49% in November 2005.
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(END) Dow Jones Newswires
August 16, 2017 22:33 ET (02:33 GMT)