Dexus bid may thwart rival's plans for CPA

GPT Group has maintained it will keep its minimum acceptance level at 50.1 per cent for its $4 billion tilt at the Commonwealth Property Office Fund (CPA), and has the capability of running the fund if Dexus becomes a hostile minority unitholder.

GPT Group has maintained it will keep its minimum acceptance level at 50.1 per cent for its $4 billion tilt at the Commonwealth Property Office Fund (CPA), and has the capability of running the fund if Dexus becomes a hostile minority unitholder.

But there were suggestions that Dexus Property was still mulling a renewed offer for the management of the CPA once it completed a review of the new documents released on Tuesday by rival bidder, GPT Group.

Dexus and its partner, the Canada Pension Plan Investment Board, hold a 14.9 per cent interest in CPA and have said they did not intend to accept the $1.27 cash and scrip offer from GPT. That would leave them as a hostile shareholder and block GPT gaining full control.

Investors speculated that Dexus management could likely look to offer cash and scrip equal to about $1.30 a CPA share, a rise from its initial $1.24 offer, which included the $41 million payment to the Commonwealth Bank for the management rights.

But if GPT's shares trade under its offer price, Dexus could relaunch its revised offer equal to $1.24 a CPA unit.

Given both deals were a combination of scrip and cash, CPA investors are being forced to pick which company will be the best manager for the office assets.

In its bidder's statement released on Tuesday, GPT said it had the strategic and financial capability to manage the range of scenarios that may arise under the offer, should it not reach the 90 per cent acceptance level.

But the document added that if "CPA unit holders do not accept the offer there is a risk that their investment in CPA may be adversely [affected] because the price of CPA may fall or they may become minority unit holders in a less liquid investment".

GPT was also given a boost with news its offer had received support from two New York-based hedge funds run by Gruss Asset Management and also a tentative nod from the US manager, Mondrian.

The statement was made amid news that GPT had appointed Liz Crotty as the new national director of leasing for office, logistics and business Parks. She was previously with Lend Lease.

Ms Crotty will replace Luke Briscoe who will move to a newly created position in GPT's office team.