Family to sell airport and business park

GOODMAN GROUP has struck a $201.5 million deal with the Goodman family to buy the 294 hectare Moorabbin Airport and surrounding Chifley Business Park, in south-east Melbourne.

By InvestSMART · 17 Aug 2010

By InvestSMART ·
17 Aug 2010

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GOODMAN GROUP has struck a $201.5 million deal with the Goodman family to buy the 294 hectare Moorabbin Airport and surrounding Chifley Business Park, in south-east Melbourne.

The deal is considered controversial as it involves the family of Goodman Group's chief executive, Greg Goodman, but investors will be given the chance to vote on it.

However, it has been approved by the group's independent directors, led by the chairman, Ian Ferrier.

The deal also requires approval from the Victorian government and other regulatory bodies.

The land and airport were bought in 1998 for about $10 million by the Goodman Hardie Industrial Fund, which over the years has morphed into the Goodman Group.

Over that time, the land and management of the airport have been with Goodman Holdings, which is owned and run by the Goodman family.

The airport will continue to be managed by Goodman Holdings, while 73 hectares have been approved for development as a community project.

Goodman Group proposes to issue 225.4 million new ordinary securities at 65? to Goodman Holdings, raising $146.5 million, as part of its funding of the purchase.

But to align Mr Goodman with the performance of the listed group, a third of those securities will be escrowed for two years and the remainder escrowed for five years.

Mr Ferrier said the deal would be earnings-positive for Goodman Group and confirmed the group's previous 2009-10 earnings guidance at 52? per security.

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Frequently Asked Questions about this Article…

What is Goodman Group buying in the Moorabbin Airport deal?

Goodman Group has struck a deal to buy the 294-hectare Moorabbin Airport and the surrounding Chifley Business Park in south‑east Melbourne for $201.5 million.

Why is the Goodman Group purchase of Moorabbin Airport considered controversial?

The deal is controversial because the airport and land have been owned and managed by Goodman Holdings, which is owned by the family of Goodman Group’s CEO, Greg Goodman — making it a related‑party transaction. To address this, investors will be given the chance to vote on the sale.

Who within Goodman Group approved the Moorabbin Airport transaction?

The sale was approved by Goodman Group’s independent directors, led by chairman Ian Ferrier, who reviewed and signed off on the proposal despite its related‑party nature.

What approvals and regulatory steps are still required for the Moorabbin Airport sale to complete?

Beyond the Goodman Group board and an investor vote, the deal still requires approval from the Victorian government and other regulatory bodies before it can be finalised.

How will Moorabbin Airport be managed after the sale and what development is planned?

The airport will continue to be managed by Goodman Holdings (the family entity). In addition, 73 hectares of the site have been approved for development as a community project.

How does Goodman Group plan to fund the $201.5 million purchase?

Goodman Group proposes to issue 225.4 million new ordinary securities to Goodman Holdings, raising $146.5 million as part of the funding package for the purchase.

Are there conditions on the new securities issued to Goodman Holdings?

Yes. To align Greg Goodman with the listed group's performance, one‑third of the new securities will be escrowed for two years and the remainder will be escrowed for five years.

What is the expected impact of the Moorabbin Airport deal on Goodman Group’s earnings guidance?

Goodman Group chairman Ian Ferrier said the transaction would be earnings‑positive for the group and he confirmed the company’s previous 2009–10 earnings guidance, as stated in the article.