Commonwealth Property Office Fund rejected a A$2.7 billion ($2.6 billion) takeover bid from the Canada Pension Plan Investment Board and Dexus Property Group because it is too low.
The proposal doesn’t provide compelling value, the manager of the fund said in a statement to the Australian stock exchange. The board of the manager, Commonwealth Managed Investments Ltd., therefore won’t grant CPPIB and Dexus access to due diligence material, it said.
The bidders made a cash-and-stock offer for the fund valued at A$1.15 a share on Oct. 11 and Dexus separately offered Commonwealth Bank an undisclosed sum to take over management rights of the office trust as it sought to cement its position as Australia’s largest office landlord. The bid, which came after an announcement by the bank in July that it was seeking to exit its property investments, was equal to the value of Commonwealth Property Office’s assets.
“Should the consortium decide to submit a revised proposal with improved terms, it will be considered on its merits,” Richard Haddock, chairman of CMIL, said in the statement today.
Commonwealth Property Office shares were unchanged at A$1.19 at 4:03 p.m. in Sydney, while Commonwealth Bank shares rose 0.1 percent to A$72.42. Dexus shares climbed 0.5 percent to A$1.065 compared with a 0.5 percent fall in the S&P/ASX 200 Index.