ABG sheds SKG stake in $284.8M selldown
Abacus Group (ASX: ABG) has agreed to sell its 19.60% interest in Storage King Group (ASX: SKG) for total gross proceeds of $284.8 million at an average price of $1.11 per security. The selldown follows the internalisation process that rendered the SKG holding non-core to ABG’s long-term strategy, prompting the group to evaluate exit pathways.
The ASK internalisation process, which saw ABG sell ASK’s responsible entity for $19 million plus approximately $5 million in net assets, was the structural event that rendered the SKG holding non-core and set the conditions for this selldown.
The transaction was structured to maximise blended proceeds by combining a strategic sale to Ki Corporation Limited at a premium to market with an underwritten institutional block trade, enabling ABG to efficiently exit its position.
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Transaction structure: two tracks, one clean exit
Strategic sale to Ki Corporation — $163.5M at a premium
ABG agreed to sell a 10.37% interest in SKG to Ki Corporation at $1.20 per SKG security, generating gross proceeds of $163.5 million. The price represents an 11.6% premium to SKG’s close price of $1.075 on 17 September 2026 and a 10.8% premium to the 5-day volume weighted average price of $1.083.
The transaction proceeds in two stages. An initial 4.49% interest (gross proceeds of $70.8 million) is expected to settle on 23 September 2026, subject to completion of the block trade. The remaining 5.88% interest sold to Ki is conditional on ABG securityholder approval via an ordinary resolution, as it constitutes a disposal of a “substantial asset” to a related party under ASX Listing Rule 10.1. A Notice of Meeting will be distributed to securityholders in due course, with a vote expected at the ABG Annual General Meeting in late November 2026.
Underwritten block trade — $121.3M at market discount
The remaining 9.23% interest in SKG was sold via an underwritten institutional block trade at $1.00 per security, generating gross proceeds of $121.3 million. The block trade price represented a 7.0% discount to SKG’s 17 September 2026 close price and a 7.7% discount to the 5-day volume weighted average price. Settlement is expected on 22 September 2026, with Barrenjoey Markets Pty Limited acting as sole underwriter.
| Transaction | Stake Sold | Price Per Security | Premium / Discount to Close | Gross Proceeds | Settlement Date |
|---|---|---|---|---|---|
| Strategic sale to Ki Corporation | 10.37% | $1.20 | +11.6% premium | $163.5M | 23 September 2026 (initial 4.49% tranche; remaining 5.88% subject to securityholder approval) |
| Underwritten block trade | 9.23% | $1.00 | -7.0% discount | $121.3M | 22 September 2026 |
The following advisers supported the transaction:
- Sole underwriter: Barrenjoey Markets Pty Limited
- Financial advisers (Ki Corporation sale): Morgan Stanley Australia Securities Limited and Barrenjoey Markets Pty Limited
- Independent adviser (board appointed): Denison Partners
- Legal adviser: Allens
What this means for ABG investors
Net proceeds from the selldown will be used to repay debt, taking gearing to approximately 30%, based on the 30 June 2026 balance sheet adjusted for the payment of the June distribution and repayment of debt with SKG sale proceeds. The reduction in gearing is intended to provide ABG with capacity for future growth opportunities.
The transaction does carry an NTA impact. ABG’s net tangible assets reduce by 7 cents to $1.52 per security as a result of the selldown.
On the distribution front, FY27 guidance of 6.70 cents per security is now expected to be at the top end of ABG’s 80%–90% payout ratio, noting this assumes EGM approval for the sale of the 5.88% interest to Ki Corporation. In FY27, 67% of the distribution is expected to be fully franked.
FY27 distribution guidance of 6.70 cents per security represents a deliberate 21% reset from FY26’s 8.50 cents, targeting a sustainable 80%-90% payout ratio of FFO as ABG transitions to its pure-play commercial mandate.
What is a block trade and why does it matter?
A block trade is a large parcel of securities sold quickly to institutional buyers, typically at a discount to the prevailing market price. The discount compensates buyers for absorbing a significant volume in a short timeframe and provides the seller with speed and certainty of exit.
The dual-structure used by ABG — a strategic sale at a premium combined with a block trade at a discount — is a common technique for exiting a large holding efficiently while maximising blended proceeds. In this case, the $1.20 per security Ki Corporation price and the $1.00 per security block trade price produced a blended average of $1.11 per security across the full 19.60% stake.
A leaner ABG focused on office markets
With the SKG position exited, ABG’s strategic identity sharpens around its core Commercial Portfolio, with a stated focus on investments in the Sydney and Brisbane office markets. The group has identified three strategic outcomes attributed to this transaction:
- Simplification of its operating model
- Strengthening of its capital position
- Concentration on growth initiatives within its core Commercial Portfolio
Lower gearing and a cleaner portfolio structure are intended to position ABG to execute on its business priorities as a specialised Commercial REIT. The source announcement does not include a named management quote on the transaction.
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