IAP: Non-binding, indicative proposal from Charter Hall

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ASX ANNOUNCEMENT

31 January 2022

Irongate Group (ASX: IAP)

Irongate Group receives non-binding, indicative proposal from Charter Hall managed partnership1

Irongate Group (IAP) announces that on Saturday 29 January 2022 it received a non-binding, indicative proposal from a Charter Hall (ASX: CHC) (Charter Hall) managed partnership comprised of Dutch pension fund PGGM (PGGM) and Charter Hall (together, the Partnership) to acquire, by way of an agreed trust scheme, all of the stapled securities in IAP for A$1.90 cash per IAP stapled security² (Indicative Proposal). Under the terms of the Indicative Proposal, IAP securityholders will be entitled to retain a distribution for the period ending 31 March 2022 of up to 4.67 cents per stapled security3.

The Indicative Proposal includes a memorandum of understanding with IAP's largest securityholder, 360 Capital4 (MOU). The MOU contains a call option over 360 Capital's 19.9% securityholding in IAP. The MOU also includes standstill and exclusivity provisions in favour of the Partnership and describes a proposal under which 360 Capital will acquire certain assets within IAP's portfolio, IAP's funds management business and IAP's co-investment stake in the ITAP Fund if the Partnership is successful in acquiring IAP. The Indicative Proposal is not conditional upon 360 Capital completing the acquisitions meaning that the Partnership will retain responsibility for funding the Indicative Proposal.

The Indicative Proposal indicates that the Partnership expects to fund the Indicative Proposal from existing financial resources, including existing cash and undrawn and new debt facilities. Charter Hall and PGGM have received approvals from their relevant Board and Investment Committees to pursue the transaction.

The IAP Board is considering the Indicative Proposal with the assistance of its advisers. IAP securityholders do not need to take any action in relation to the Indicative Proposal and are advised to exercise caution when dealing in their IAP stapled securities.

The Indicative Proposal contains the following conditions:

• Completion of due diligence to the satisfaction of the Partnership (request for 6-week exclusive due diligence period);
• Final approval of the Partnership boards and investment committees prior to execution of an agreed scheme implementation Agreement (SIA);
• Execution of an SIA on customary terms and conditions including with respect to providing exclusivity and deal protection (including a break fee, no talk and no shop);
• JSE and other regulatory approvals;
• FIRB approval; and
• The unanimous recommendation of the IAP Board.

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IAP's advisers are Macquarie Capital (Australia) Limited and J.P. Morgan Securities Australia Limited as its financial advisers, King & Wood Mallesons as its Australian legal adviser and Cliffe Dekker Hofmeyr as its South African legal adviser.

This announcement has been authorised for release by the Board.

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1. This announcement constitutes a cautionary announcement under paragraph 11.40 of the JSE Listings Requirements.
2. Reduced by any subsequent distribution announced or paid in respect of IAP, excluding the distribution for the period ending 31 March 2022. A$1.90 per IAP stapled security represents an implied price per IAP stapled security in South African Rand of R20.65, based on the South African Rand to Australian Dollar ratio of 0.092 as at 28 January 2022.
3. The distribution for the period ending 31 March 2022 represents the top end of the guidance given to the market by IAP on 9 December 2021.
4. 360 Capital includes 360 Capital Group and 360 Capital REIT

ENDS

FOR FURTHER INFORMATION, PLEASE CONTACT:

Lucy Spenceley

Investor Relations and Company Secretary

T +61 2 7906 2006

1. ir@irongategroup.com.au

Sue Cato

Media

T +61 0419 282 319 cato@catoandclive.com

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• 10.5% premium to 360 Capital's further improved indicative proposal of $1.72 per security as announced on 15 December 2021.

The Offer Price of $1.90 per security represents an implied price per security in South African Rand of R20.651. Based on IAP's South African Rand denominated security price on the Johannesburg Stock Exchange ("JSE"), this represents a:

• 28.3% premium to IAP's closing price of R16.10 per security on 15 October 2021, being the day before the date of 360 Capital's Initial Indicative Proposal; and
• 13.2% premium to IAP's last closing price of R18.24 per security on 27 January 2022.

In formulating the Offer Price, we have made the following assumptions:

• IAP has 677,569,754 ordinary securities on issue, with no options or performance rights that remain on issue. The Offer Price assumes that IAP has no other securities, or rights to be issued securities, on issue.
• IAP's net debt is no greater than $549 million2 and IAP remains in full compliance with its banking covenants.
• No dividends or other distributions will be announced or declared by IAP following the date of this letter excluding the ordinary distribution for the period ending 31 March 2022 of up to 4.67 cents per security (and in the event that any dividend or other distribution is announced or declared, the Offer Price will be adjusted accordingly).
• IAP has no material liabilities which have not been reflected in IAP's most recently filed accounts, or announced to the ASX since the date of filing of those accounts.
• There are no material acquisitions or disposals, and no material changes to the business from the position disclosed to the ASX.

Benefits to IAP securityholders

The Proposal will deliver significant benefits to IAP unitholders including:

• Certainty of all-cash consideration, which is fully funded, delivering immediate value at a compelling price;
• Attractive premiums to IAP's recent trading prices and NTA; and
• Subject to limited conditions and execution risks.

Charter Hall has significant experience in leading corporate transactions, including the recent ~$1.7 billion acquisition of ALE Property Group (ASX: LEP) in December 2021 on behalf of a consortium comprised of Charter Hall Long WALE REIT and Hostplus.

Funding

The Partnership's members have sufficient financial resources to fund an acquisition of IAP. The Partnership intends to utilise a combination of existing cash and undrawn debt from its joint venture members and new debt facilities to finance the acquisition of IAP.

Both parties have received approvals from their relevant Boards / Investment Committees to pursue this transaction. In support of the Proposal, the Partnership has obtained a letter of support from Barclays and Morgan Stanley to provide secured debt financing against IAP's portfolio.

About the Partnership

Charter Hall and PGGM are experienced partners with a track record of successfully completed transactions. In 2019, Charter Hall and PGGM formed an Industrial & Logistics Partnership which has secured investments in 10 properties with a value of $0.5bn. An overview of both Charter Hall and PGGM is provided below.

1. Based on South African Rand to Australian Dollar ratio of 0.092 as at 28 January 2022.
2. Based on the pro forma position post the acquisitions and placement announced on 9 December 2021

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About Charter Hall

With over 30 years' experience in property investment and funds management, we're one of Australia's leading fully integrated property groups and an ASX100 Group with a market capitalisation of approximately $8 billion. We use our property expertise to access, deploy, manage and invest equity across our core sectors - Office, Industrial & Logistics, Retail and Social Infrastructure.

Operating with prudence, we've curated a diverse $61.3 billion portfolio of 1,506 high quality properties. With partnership at the heart of our approach, we're creating places that help grow communities; turning them into the best they can be and unlocking hidden value. Taking a long- term view, our $9 billion development pipeline delivers sustainable, technologically enabled projects for our customers.

About PGGM

PGGM is a not-for-profit cooperative pension fund service provider. As a pensions administrator, asset manager and advisor to pension fund boards, it executes its social mandate: to provide for good old-age incomes for 4.4 million participants in the Netherlands. On December 31, 2021 PGGM managed long-term pension capital of EUR 291 billion worldwide.

Due diligence process

Any final, binding offer is subject to the satisfactory completion of confirmatory due diligence on an exclusive basis. The Purchasers are prepared to enter into a confidentiality agreement on customary terms and commence due diligence immediately. Due diligence investigations are expected to focus on customary areas including commercial, property, financial, legal and tax matters. Charter Hall, on behalf of the Partnership, has resources on standby to engage immediately and will ensure the process is completed in a timely manner. Charter Hall has engaged Barrenjoey and Morgan Stanley as its financial advisers in relation to the transaction.

Charter Hall has reviewed IAP's public disclosures and is familiar with many of its properties. As such Charter Hall expects to be able to complete due diligence within 6 weeks from the date that the information is made available. Please refer to Annexure 1 for a preliminary due diligence request list.

Exclusivity

Given the significant resources committed to this potential transaction, the Partnership require a period of exclusivity to conduct due diligence investigations and to come to an agreement with IAP's Board.

During that time, IAP's board and its advisors would not engage with other parties in relation to a potential transaction or proposal. This requirement of exclusivity would be subject to documentation executed between the Partnership and IAP.

Proposal transaction structure

The Partnership's intention is for the Proposal to be implemented via a scheme of arrangement that is unanimously recommended by the Board of IAP. This structure is consistent with our desire for an agreed transaction. The Partnership are willing to work with IAP and its advisers to assist in implementing the Proposal.

We propose that the Partnership and IAP would enter into a Scheme Implementation Agreement ("SIA") that contains customary conditions including market standard no shop, no talk and a break fee equal to 1% of IAP's equity value at the Offer Price.

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