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Dexus CEO Denies Commonwealth Office Fund Buyout Report

Updated on

Aug. 19 (Bloomberg) -- Dexus Property Group Chief Executive Officer Darren Steinberg denied reports that Australia’s biggest listed office landlord has made a takeover offer for Commonwealth Bank of Australia’s office fund.

Dexus hasn’t made a proposal to the bank or the manager of Commonwealth Property Office Fund following the acquisition of a 14.9 percent stake in the fund last month, Steinberg said in a telephone interview. The Sydney-based company today reported net income of A$514.5 million ($473 million) in the 12 months ended June 30, compared with A$181.1 million a year earlier.

Dexus agreed in July to acquire the stake through a forward contract arranged by Deutsche Bank after Commonwealth Bank said it was seeking to exit its property business. Dexus has made an informal takeover proposal for the office fund to Commonwealth Bank or its funds management arm and is searching for a backer for a possible A$3 billion bid, the Australian newspaper reported today without saying where it got the information.

“Contrary to media reports, no informal or formal proposal has been made by Dexus to either the bank or to the CPA responsible entity,” Steinberg said today. “The investment creates a variety of options for Dexus,” he said, without providing further details.

Boosting Funds

The fund “may be important to Dexus in the long term,” Steinberg, who was head of property at Commonwealth Bank’s funds management arm before taking over as Dexus’s CEO in March 2012, said in July.

The company has engaged Citigroup Inc. and JPMorgan Chase & Co. to act as advisers, according to the Australian report. Steinberg said that Dexus has been working with the two banks and Deutsche Bank AG over more than 12 months on matters unrelated to a proposal.

Dexus, which sold off properties in the U.S. and Europe during the year to focus on its Australian office business, is seeking to boost funds from operations to 8.15 Australian cents a share in fiscal year 2014, compared with 7.75 Australian cents in the 12 months to June 30, it said.

The company, which is also seeking to grow its asset management business, said funds grew by 9.5 percent to A$6.1 billion in fiscal year 2013. When properties that are currently being developed are taken into account, that will increase to 20 percent, Steinberg said.

Dexus shares slipped 1 percent to A $1.015 at the close of trading in Sydney, while the benchmark S&P/ASX 200 index closed little change.

To contact the reporter on this story: Nichola Saminather in Sydney at

To contact the editor responsible for this story: Andreea Papuc at

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