Dexus venture lobs $3.7b offer for CPA trust
The deal is 60 per cent cash between Dexus and CPPIB and also the issue of Dexus securities.
The directors of CPA have advised unit holders, who must ultimately approve the deal, to take no action. It is an indicative and non-binding offer.
The trigger for the deal was in July when the manager of CPA, the Commonwealth Bank, revealed it was looking to internalise the management of its two listed REITs, which also includes the CFS Retail Trust.
Soon after, Dexus completed an option deal to acquire 14.9 per cent of CPA. Speculation persists that the private Gandel Group, which is a
co-owner of malls with CFS and also a large shareholder of CFS, will make a play for that trust.
The Canadian pension fund, one of the world's biggest with more than $C165 billion in assets, revealed this year that it owned $C5.8 billion of Australian real estate, infrastructure, public equity and private equity.
Dexus, whose chief executive, Darren Steinberg, was the former head of property at Colonial First Asset Management, the manager of CPA, had been expected to make a move on the trust. Mr Steinberg said if the deal were approved it would boost the funds under management for Dexus to $8 billion, making it one of the biggest office landlords in the country.
The plan is to keep CPA as an unlisted fund, with Dexus as manager. CPA owns a large amount of high quality office towers across the country.
"Recently the CPPIB approached us with this proposal and it's given Dexus the ability to proceed with the offer," Mr Steinberg said.
"If the deal is approved, we will look to rationalise the portfolio, which will include the sale of non-core office assets."
Brokers said the the deal, if implemented, would lead to CPA becoming an unlisted fund.
Frequently Asked Questions about this Article…
Dexus Property and the Canada Pension Plan Investment Board (CPPIB) have lodged a combined cash-and-equity proposal for the $3.7 billion Commonwealth Property Office Fund (CPA). The offer is structured as 60% cash (shared between Dexus and CPPIB) plus the issue of Dexus securities. The proposal is indicative and non‑binding, and CPA unit holders must ultimately approve any deal.
The main parties named in the article are Dexus Property and the Canada Pension Plan Investment Board (CPPIB) as the bidders, the Commonwealth Property Office Fund (CPA) as the target, and the Commonwealth Bank (the manager that revealed plans to internalise management). The article also notes speculation about the private Gandel Group as a potential player.
An indicative, non‑binding offer means the proposal is preliminary and not legally final — terms can change and the transaction isn’t guaranteed. CPA directors have advised unit holders to take no action because the offer requires further due diligence, negotiation and final approval from unit holders before it can proceed.
Dexus’s chief executive Darren Steinberg said an approved deal would boost Dexus’s funds under management to about $8 billion, making it one of the country’s biggest office landlords. The plan in the proposal is to keep CPA as an unlisted fund with Dexus acting as manager.
CPA owns a large portfolio of high‑quality office towers across Australia. Dexus has said it would look to 'rationalise the portfolio' if the deal is approved, which would include the sale of non‑core office assets.
The trigger was the Commonwealth Bank, the manager of CPA, revealing plans to internalise the management of its two listed REITs, which include CPA and the CFS Retail Trust. Soon after that announcement, Dexus completed an option deal to acquire a 14.9% stake in CPA, and the CPPIB approached Dexus with the joint proposal.
The proposal is a mix of cash and Dexus securities, with about 60% of the consideration described as cash. Exact allocations to individual unit holders would depend on the final, approved deal terms and any vote outcomes. Until a binding agreement is reached, unit holders have been told to take no action.
The article notes ongoing speculation that the private Gandel Group — a major mall co‑owner and large shareholder in related trusts — might make a play for the trust. However, at the time of the article the formal proposal on the table was from Dexus and CPPIB.
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