Dexus' A$1.476 billion acquisition

In May 2019, Dexus, one of Australia’s leading real estate groups, acquired the 80 Collins precinct for A$1.476 billion.

Located in the Eastern Core of Melbourne’s CBD, it comprises an existing 47 Level A-grade office tower, a new 35 level premium office tower, new retail podium and a new 255-room boutique hotel. New components of the 80 Collins precinct are currently being developed.

Dexus acquired a 75% ownership interest in the 80 Collins precinct, with Dexus Wholesale Property Fund holding the remaining 25% interest.

MinterEllison advised on the acquisition of the 80 Collins precinct and helped guide Dexus on all aspects of the existing tower and the new development, including completion of a comprehensive and complex due diligence process. Our work included navigating various legal and commercial risks across corporate, construction, property and finance matters.

“Vacancy in the Melbourne CBD office market is nearing an all-time low, supported by strong population growth and significant pre-commitments across the upcoming supply pipeline,” said Darren Steinberg, Dexus CEO.

Dexus is one of Australia’s leading real estate groups, managing an Australian property portfolio valued at $28.9 billion

Promoting flexibility through enterprise agreements

Seven's enterprise agreements were very generous – having been agreed to when the media industry was vastly different and before the emergence of the competitive threat posed by digital disruptors. Amongst other things, they contained redundancy entitlements of up to 80 weeks' pay. This was a significant impediment to Seven's ability to restructure to meet the fundamentally changed competitive landscape.

MinterEllison represented Seven in successfully renegotiating its main enterprise agreement with major reforms – including advising on strategy, representing Seven in face to face negotiations and in three sets of proceedings.

Negotiations reached an impasse after nearly a year (mainly over the issue of redundancy) and there was a failed vote of employees. We then applied, on behalf of Seven, to terminate its existing enterprise agreement and sought parallel conciliation by the Fair Work Commission. Following conciliation, Seven then went to a direct vote of employees for a second time, again over the objection of the unions – which was then successful.

The ultimate agreement reduced the maximum redundancy entitlements for compulsory redundancy from 80 weeks' pay to 30 weeks – as well as introducing numerous other flexibilities.

The scale of this reduction is almost unprecedented in any industry and was achieved without disruption to Seven's broadcasting.

"The new agreement has given Seven the flexibility it needs to operate in today's environment, and to continue to make an important contribution to Australia's media landscape," said Katie McGrath, Group Executive, Human Resources at Seven West Media.

Individual directors being held accountable for company activity

Regulators throughout Australia are taking a more hard line approach to corporate misconduct, with an increased focus on the individuals behind the decisions of the corporates. Consistent with this, the recommendations from the Financial Services Royal Commission indicated that more responsibility will be placed on individual directors for the actions of their companies.

The CDPP's criminal cartel proceedings relating to ANZ's $2.5 billion capital raising in 2015, provides a notable example of this approach, with six senior individuals facing criminal charges alongside their companies in relation to the alleged cartel behaviour.

This is an extremely high profile domestic cartel case and the first involving alleged cartel conduct in an equity capital markets context. This may have major repercussions for how banks (and their individuals) will be able to work together on equity capital market deals in the future.

While the ability to bring criminal charges against individuals has existed for some time, this case points to a new direction, where individuals are much more likely to be charged, and the regulators willing to pursue criminal (and not just civil) penalties.

MinterEllison is representing one of the individuals in the case.

The case is likely to set the scene for others in the future, and is changing the way directors and other individuals within an organisation or company manage culture and risk.

Commercialising the Victorian Land Titles Registry

In August 2018, the Victorian Government commercialised the Victorian Land Titles and Registry office for the $2.86 billion, which involved granting a 40 year concession to First State Super. MinterEllison advised the Victorian Government on the deal – which took over a year – through the scoping study phase and commercialisation.

It was a landmark transaction with a unique structure, receiving the highest price for a land titles office concession in Australia – and was achieved without compromising the State's preferred risk allocation.

Importantly, the transaction model means that Victoria kept control over prices for statutory land registry services.

"This is an outstanding result and another vote of confidence in the Victorian economy, one that will deliver a major boost to our already unprecedented investment in schools, hospitals, road and rail," Victorian Treasurer Mr Tim Pallas said.

This transformational outcome required a seamlessly integrated end-to-end solution with corporate, finance, competition, regulatory, IT, property and employment expertise with an infrastructure and government-focused lens.

Stockland's transformation project

Stockland – one of Australia's largest diversified property groups – was implementing a transformation program for its conveyancing team including the roll out of e-contracting and PEXA across four states.

MinterEllison Flex provided lawyers to support Stockland through this process and to cover a parental leave position. Through FY19, Stockland used two Flex lawyers who assisted with activities such as updating compliance plans, on-boarding protocols, reviewing training materials, advising on application of Model Participation Rules and associated regulatory material.

One of our Flex lawyers also served as the Business Lead in relation to the Core Financial System transformation project, managed legal problem solving as the internal escalation point within the national team and oversaw the e-conveyancing program and relationship management with PEXA.

"During the appointment we were fortunate to work with two Flex lawyers who not only contributed significantly to an internal transformation project, but also managed a national team and actively participated in our leadership group. Our colleagues from Flex went beyond filling a resourcing gap and made valuable contributions to our team and the broader organisation. Beyond the day to day requirements for the role they provided a fresh lens to assess risks and opportunities in the business and make connections across the team and leadership group," said Stockland General Counsel and Company Secretary, Katherine Grace.

Leaving a positive legacy when closing a power station

The recent successful closure, dismantling and remediation by Flinders Power of its coal fired power stations at Port Augusta, and the associated coal mine at Leigh Creek, both in South Australia, was a great example of how to successfully undertake such a major operation.

The circa A$300 million closure program was the largest and most complex program of its type in South Australia, and offers a model for how future large infrastructure and mine closure programs should be carried out.

MinterEllison's team advised Flinders Power on all aspects of the project, working side-by-side with Flinders Power over four years to culminate in the recent successful conclusion of the closure and remediation program.

Flinders Power and its collaborative team of experts ensured that local communities and other key stakeholders were taken along on the journey by consulting with them and keeping them informed and involved throughout the process. By mapping out a strategy with a clear focus on a timely, efficient and fully compliant best practice closure program that was also robust and flexible enough to meet challenges, obstacles and opportunities during the implementation phase, Flinders Power was able to succeed in meeting its goals.

Through its detailed up front planning and engagement with stakeholders, Flinders Power was able to generate the greatest efficiencies, lessen the risk of unforeseen issues down the track, and even generate innovative revenue streams - thereby reducing the 'net' cost of the overall closure program. 

Delivering social and affordable housing

Delivering social and affordable housing is a key policy for government across Australia. The New South Wales Land and Housing Corporation's (LAHC) A$2.2 billion redevelopment of Ivanhoe Estate is a flagship project to be delivered under the Communities Plus Program. The project aims to move beyond social housing and will link housing assistance to participation in education, training and local employment opportunities.

The program will comprise over 3,500 dwellings, over 1,000 social housing units and 128 affordable housing units, a high school, retirement facility, a senior-wellness centre and various parks and child-care facilities. It has been a great success to date, with LAHC achieving greater than one and a half times the minimum number of social housing units. The model is now being rolled out on multiple other major development sites in Sydney, as well as forming the basis for the NSW Government’s first build-to-rent project at Redfern.

MinterEllison was the sole legal adviser to LAHC in this project. Our advice covered all aspects of the project including complex structuring and negotiation of all project documents.

As a result of this project, LAHC has provided the basis for a seamlessly integrated community, sustainable outcomes for the tenants and optimised the value for money return to the NSW Government.

Building strength in retail: Restructuring Greenlit Brands

With the retail sector facing several challenges in FY19, we were pleased to help our client, Greenlit Brands (formerly known as Steinhoff Asia Pacific) – which operates 14 different businesses in the household goods and general merchandise sectors – continue to grow.

Greenlit Brands generates over A$2 billion in revenue, employs 10,000 people and owns household brands including Freedom Furniture, Snooze, Fantastic Furniture, Plush, OMF, Best & Less, Harris Scarfe and Postie.

In December 2018, accounting irregularities suddenly disclosed by its parent body in South Africa, Steinhoff International, led to a rapid 90% share price decline affecting the overseas parent, and resulted in outstanding bonds issued by the parent being significantly downgraded.

Our team provided urgent restructuring advice to the Australasian business, including advice regarding directors' duties, led negotiations with the group's local banking syndicate and advised on corporate opportunities to restructure the group's capital base.

Greenlit Brands secured its funding requirements for the next 12 months, with a $300m refinance package provided by its existing syndicate of six local and international banks.

We continue to advise Greenlit Brands on a range of general corporate, commercial and real estate matters, in addition to refinancing opportunities.

'Pleasingly, we have locked in funding without any unplanned asset sales or the loss of any jobs, preserving our position as a leading retail organisation,' said Michael Ford, Group CEO of Greenlit Brands.

oOh!Media fast tracking innovation in media advertising

oOh! – a leading media operator in Australia and New Zealand – creates deep engagement between people and brands through their use of innovative physical and digital solutions. In August 2019, it acquired Adshel for a total consideration of A$570m.

This major acquisition was in line with oOh!media's digital strategy with street furniture early in its digitisation life cycle. The transaction created significant synergies and client value creation opportunities. The transaction also complemented oOh!media's existing portfolio of sites in differing audience locations.

“For oOh!media, the acquisition of Adshel will add a missing piece to our diverse Out Of Home portfolio, by adding a national street furniture and transit offering,” oOh!Media CEO, Brendon Cook said.

“Through this acquisition, we will deliver better service to our advertisers and at the same time fast track innovation in our product offering, therefore providing us with exciting opportunities for the business and its growth."

MinterEllison advised oOh!Media on the complex transaction. The acquisition required approvals from the ACCC and overcame an early bid from a competing potential acquirer (who itself was the subject of a takeover offer).

This acquisition opens the door to exciting new opportunities for the media advertising landscape in Australia.