Fresh CPA valuations are no sweat for bidder Dexus

Yesterday, the Commonwealth Property Office Fund, which has the ticker code CPA, said in its quarterly update that it had revalued its $3.7bn portfolio, and that it was worth 1.8 per cent more, increasing the company's net tangible asset backing per security by 1c to $1.16.

Observers said the valuations provided little uplift, which meant Dexus was unlikely to sweeten the bid by much -- perhaps a few cents to about $1.20 per security.

CPA's shares are trading at $1.19.

The Dexus Property Group and the Canada Pension Plan Investment Board launched an offer for CPA almost two weeks ago, comprising 68c cash and 0.4516 of Dexus securities for every share.

At the time, the offer was worth almost $2.7bn, or about $1.15 a share, which CPA's managers later rejected as too low. The offer has since moved higher after Dexus shares rallied.

Meanwhile, sources have questioned why CPA was still claiming a proposal by the Commonwealth Bank to internalise the trust was "highly conditional, indicative and incomplete", when its managers had also said that it was conducting due diligence on the proposal.

Sources said it would not be typical for due diligence to be undertaken and talks to continue for three months if the offer was highly conditional and incomplete.

They also said that the board rejected the Dexus consortium proposal on value grounds, but never provided any support for their position.

Before the consortium bid was launched, reports have suggested that Dexus last week made an offer to buy CPA's management rights for between $25m and $45m, which was below the $60m value estimated by analysts.