Revised bid could make Dexus top landlord
Dexus and CPA went into a trading halt on Friday morning after a revised cash and scrip, suggested to be at $1.21 a CPA unit, was made to CPA's board for deliberation.
Dexus already owns a 14.9 per cent put option in CPA and made a joint share and equity offer with the CPPIB for CPA at an equivalent of $1.15 a unit in October. The market value of CPA is $2.7 billion and it carries another $1 billion in debt.
But that was rejected by the chairman of independent directors of CPA, Colonial Managed Investment Ltd's Richard Haddock, as too low.
This week, CPA issued revised property valuations that increased the net tangible asset value to about $1.19, where it was before the trading halt, which increased the pressure on Dexus to sweeten its offer.
A successful bid would make Dexus the owner and manager of prime grade Australian office worth $11.5 billion, and give it a 26 per cent share of the Sydney prime grade office. Third party assets under management, via the wholesale funds, would increase to $8 billion.
John Kim, real estate analyst at CLSA, said the CPPIB was the eighth largest pension fund in the world, with $US178 billion ($188 billion) of assets including $US22 billion in real estate, and has joint ventures with global operators such as Westfield, Simon Property, Goodman, CapitaLand and Blackstone.
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.
Frequently Asked Questions about this Article…
Dexus Property Group's revised bid, in partnership with the Canada Pension Plan Investment Board, is significant because if accepted, it could make Dexus the largest office landlord in Australia. This move would enhance their portfolio and market presence significantly.
Dexus Property Group's revised bid, in partnership with the Canada Pension Plan Investment Board, is significant because it could make Dexus the largest office landlord in Australia if accepted by the Commonwealth Property Office Fund's independent directors.
Dexus's revised offer for the Commonwealth Property Office Fund is suggested to be around $3.8 billion, with a cash and scrip offer of $1.21 per CPA unit.
Dexus's revised offer for the Commonwealth Property Office Fund is suggested to be around $3.8 billion, with a cash and scrip offer of $1.21 per CPA unit.
Dexus's initial offer for CPA was rejected because the chairman of independent directors, Richard Haddock, deemed it too low. The initial offer was equivalent to $1.15 per unit.
Dexus's initial offer for CPA was rejected by the chairman of independent directors, Richard Haddock, because it was considered too low at an equivalent of $1.15 per unit.
A successful bid would make Dexus the owner and manager of prime grade Australian office properties worth $11.5 billion, and increase their share of the Sydney prime grade office market to 26%.
A successful bid would increase Dexus's ownership and management of prime grade Australian office properties to $11.5 billion and give it a 26% share of the Sydney prime grade office market.
Dexus is partnering with the Canada Pension Plan Investment Board (CPPIB) for this bid. CPPIB is one of the largest pension funds globally, with significant investments in real estate.
Dexus is partnering with the Canada Pension Plan Investment Board (CPPIB) for this bid.
The deal was triggered in July when the Commonwealth Bank, the manager of CPA, announced it was looking to internalize the management of its two listed REITs.
The current market value of the Commonwealth Property Office Fund is $2.7 billion, with an additional $1 billion in debt.
If Dexus's bid is successful, investors could benefit from Dexus's expanded portfolio and increased market share, potentially leading to enhanced returns and stability in their investment.
The recent property valuations increased the net tangible asset value to about $1.19, which put pressure on Dexus to improve its offer.
The Canada Pension Plan Investment Board contributes to the bid by providing financial backing and expertise. As a major global investor with extensive real estate holdings, their involvement adds credibility and strength to the bid.
The Canada Pension Plan Investment Board is a joint partner with Dexus in the revised bid and is one of the largest pension funds globally, with significant real estate investments.
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