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Dexus, CPPIB Lose Commonwealth Bank Fund Bid Exclusivity

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Canada Pension Plan Investment Board and Dexus Property Group lost exclusive access to negotiations in their bid for the listed office trust managed by Commonwealth Bank of Australia, after failing to match a A$3 billion ($2.8 billion) offer from GPT Group.

Dexus, Australia’s biggest publicly traded office landlord, will continue evaluating the trust on a non-exclusive basis, Commonwealth Property Office Fund said in a regulatory filing. The trust’s manager, Commonwealth Managed Investments Ltd., ended the exclusive talks after Dexus and CPPIB didn’t raise their A$2.8 billion bid in response to GPT’s competing proposal last week, it said.

Today’s announcement allows GPT to begin discussions on the fund as it fights Dexus for control of A$3.8 billion of office buildings in Australia’s biggest cities. Dexus, which in July agreed to buy a 14.9 percent stake in the fund known as CPA, said last week it won’t back GPT’s offer and won’t sell its shares to its rival.

CPA’s manager “shouldn’t remain in exclusive discussions with one party when there’s another proposal on the table,” said Penny Berger, spokeswoman for the unit of Commonwealth Bank. Ending the agreement allows the fund’s manager “to discuss the proposal with GPT, which they haven’t been able to do until now.”

While Dexus and the Canadian fund are committed to their bid, it’s “too early” to respond to GPT’s proposal, Dexus said separately today. The companies have entered into a new confidentiality agreement with CPA’s manager and will continue with due diligence, it said.

GPT Statement

GPT plans to submit its bidder’s statement to the Australian stock exchange on Dec. 3, it said in a separate statement today.

GPT said last week that it would sell A$1.1 billion of CPA’s buildings to GPT’s unlisted office fund should it be able to proceed with compulsory acquisition of all shares in the office trust. Without a complete takeover, GPT would still be able to appoint a manager of CPA’s buildings without the need to sell assets, it said today.

CPA shares were unchanged at A$1.265 at the close of trading in Sydney. Dexus shares rose 1.4 percent to A$1.06, and GPT climbed 2.3 percent to A$3.64, while the benchmark S&P/ASX 200 index added 0.3 percent.

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