Dexus Adds Cash Distribution to Sweeten Investa Office Fund Deal

  • Investa Office says unaware of competing bid from Mirvac, CIC
  • Investa unit holder meeting deferred after improved offer

Dexus Property Group has sweetened its offer for Investa Office Fund, which said it wasn’t aware of a competing bid from a consortium that’s speculated to include Blackstone Group and China Investment Corp.

Dexus added a cash distribution of 7 Australian cents to its existing offer, taking the total to A$4.24 a unit or A$2.6 billion ($2 billion), Investa Office Fund said in a statement to the stock exchange Wednesday. Dexus cited a A$19 million drop in transaction costs largely due to reduced financing costs for the special distribution.

The increased offer comes as Investa Office Management asked unit holders of Investa Office Fund to reject Dexus’s bid and proposed an alternative joint venture plan. The independent board of directors of Investa Office Fund said it continues to recommend the Dexus proposal in the absence of a superior counter bid.

While the board also noted “recent press speculation” about a group including Mirvac Group, Blackstone and the Chinese sovereign wealth fund CIC, it hasn’t received and isn’t aware of any competing proposal.

Besides the 7 Australian cash distribution, Dexus is offering 0.424 of its securities and about 82 Australian cents in cash for each share in the Australian real estate investment trust.

The office fund deferred an unit holder meeting scheduled for April 8 to a later date to allow investors to consider the sweetened proposal.

A deal would add 450 new clients and almost double Dexus’s wholly owned office assets to 29, it said. Dexus manages an office portfolio of 1.7 million square meters (18 million square feet) located predominantly across Sydney, Melbourne, Brisbane and Perth, and is the largest owner of office buildings in the Sydney central business district.

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