FKP Property is looking to raise about $200 million to retire debt and its key shareholders, Stockland and Mulpha, are expected to support the deal.
The group went into a trading halt yesterday while it finalises the details, expected to be released at its full-year results today. Market sources said the capital raising could be done at 20? to 25? per security. The shares last traded at 38? on Friday.
Stockland has a direct stake of 15 per cent in FKP, as well as first right of refusal over its retirement assets, while Mulpha owns a direct 26 per cent stake.
Last week, FKP said its long-running chief executive, Peter Brown, was to retire but he would stay in that role until February to oversee the group's strategic review. The news of his departure was not accompanied by any changes to full-year 2012 earnings guidance of net operating profit between $91.9 million and $104.3 million.
Brokers expect further clarity over earnings and strategic outlook at the results briefing.
In June, Mr Brown told investors the strategic review of FKP's retirement portfolio had two key streams, operational and organisational.
While at an early stage of the process, the company said its conclusion was "FKP may pursue a demerger to separate its retirement and development trust businesses".