Few have heard of Brisbane’s Sentinel Property Group, including the management and board of Estia Health, so you can imagine their surprise when a note to Sentinel’s high net worth private investors was leaked last Wednesday stating that Sentinel is closing in to take over Estia.
Sentinel was established in 2010 by Ex LJ Hooker and CBRE executive Warren Ebert (pictured) and since then he has built a property fund business valued at close to $1 billion across “45 retail, industrial, office, land, tourism and agribusiness assets”. They raise funds “from high net worth individuals who will invest $100,000 or more”.
Their ‘elevator pitch’ video to new investors talks of starting with a 9% annual return plus capital gain.
The private investor note explains Sentinel has built a holding of just under 5% in Estia. The note states it is looking at alternatives to raise funds to get control of Estia. Once achieved it plans to sell the operations business of 60 of the aged care homes for $300 million to an unnamed established operator – since revealed by Sentinel as RSL Care (QLD) – plus another eight homes for a further $60 million to another operator.
Sentinel will retain ownership of the 60 properties and lease them to RSL Care.
Estia CEO Norah Barlow tells us they had never heard from Sentinel about their interest in Estia. They don’t know them and there had been no approach.
Warren Ebert is quoted as saying they have been working on their Estia plan for 12 months and he is upset that Estia, on learning of the investor notes, have made them public. He states they are private and confidential.
We contacted Steve Muggleton, CEO of RSL Care + RDNS. He stressed that talks to date were preliminary and the proposal remains highly conditional.
“The Group has been speaking with Sentinel about operating Estia’s facilities should, and only on the basis that, Sentinel acquires the necessary controlling interest in Estia,” he said.
“The terms and conditions of the proposal and transaction documents are yet to be negotiated and agreed and will be subject to the receipt of all necessary regulatory, funding, Board and other approvals.
He says the proposal, should it complete, supports the Group’s growth strategy to expand its reach across the Eastern Seaboard.
Norah Barlow just finds it “interesting”. She points out that the figures mentioned undervalued the business and that they are on track with their financial goals and are in fact performing better than some other operators.
Warren Ebert meanwhile has gone quiet.
