Sudden Sewell departure has negligible impact on Fed Centres
Despite leading Federation Centres removing the man who led the business through its merger with the Novion Property Group, research house, Morningstar believes the move had had a "negligible" impact on the business.
As previously reported, Federation Centres parted company with chief executive, Steven Sewell, earlier this month, less than two months after the conclusion of the merger, and was replaced by former Novion chief executive, Angus McNaughton.
Despite the decision to remove the Sewell, Morningstar upgraded its valuation for Federation Centres, from $2.90 to $3.10.
"The sudden removal of a chief executive is destabilising for any business, but the impact is expected to be negligible in this instance, as McNaughton only vacated the chief executive role of Novion two months prior," Morningstar said.
"Further, he had intimate knowledge of the business, with assets formerly under his stewardship at Novion representing two thirds of the merged entity."
With $3.1 billion slated for redevelopment of Federation's legacy assets, Morningstar forecast a "significant upside from reinvigorating or redeveloping many assets".
AUTHOR
Nicholas O'Donoghue
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