An appraisal report has backed a $20 million deal to bring the management of Argosy Property Trust's portfolio in house, saying it's likely to be cheaper and easier to do than rival proposals.
The deal to pay ANZ Bank subsidiary, OnePath, to end its involvement managing Argosy's properties has been controversial, with some larger unitholders saying the cost is far too high.
The report by Grant Samuel says the deal is in the best interests of unitholders, and the price is within the valuation range of $19.7 - $23.7 million.
Independent director Trevor Scott says it's superior to the other proposals, that include firing the manager.
Grant Samuel says the value of internalisation, (Argosy managing its own portfolio), exceeds $20 million due to cost savings of $2.9 million per year.
The appraiser also estimates that firing the manager could cost up to $7.9 million, and that's before possible litigation costs, and other unquantifiable charges.
Mr Scott says DNZ Property Fund 's offer of merging should be left until after Agrosy's investors consider the best structure to run the business.
The trustee, Guardian Trust, also tacitly backs the deal.
It reiterated that OnePath has not breached its obligations under the Trust Deed, nor has it failed to carry out its duties to the Trustee's satisfaction.
Meanwhile, the trustee says DNZ's merger proposal is complex and costly, and it may have to apply to the Court for direction on how to proceed.
A special meeting to consider all proposals will be held at the end of the month, and the successful option will require 75% support of the votes cast.