Shares in property fund manager Valad (VPG) fell as much as 20% after the company revealed it has entered into a strategic alliance with US real estate investment trust, Kimco Realty Corp.
The deal will allow Kimco and Valad to develop their respective real estate businesses by leveraging the complementary distribution networks of both groups.
"The alliance is expected to focus on the marketing and introduction of funds management products and opportunities to major pension fund and institutional investor networks," the pair said in a joint statement.
Kimco has made a $200 million capital contribution in the form of a convertible note issued by Valad.
"Valad's funds management business has traditionally targeted Asia Pacific and European wholesale investors. The US and Canadian investor market is currently untapped by Valad and this represents an exciting opportunity for us," Valad's executive chairman Stephen Day said.
"The alliance will provide Valad with access to prominent US institutional investors with whom Kimco has established relationships," he said.
"In addition to the strategic benefits of this deal, our strengthened balance sheet position represents prudent capital management in light of current volatility in debt and equity markets.
"This raising enables to repay virtually all debt which expires in the next 12 months which we believe is sound practice," Day said.
Kimco is a real estate investment fund and is one of the largest U.S owners of shopping centres. It is listed on the New York Stock Exchange (NYSE).
Valad shares were placed into a trading halt on Monday pending an announcement. On Friday, its shares jumped 15% amid speculations of a takeover offer.
Shares in VPG fell 22 cents or 18% to $1.00.
