Dexus-CPPIB offer alternative CPA bid

Office, industrial and retail property investor Dexus Property Group has added an alternative to its joint takeover offer for the Commonwealth Property Office Fund (CPA).


Dexus and the Canada Pension Plan Investment Board (CPPIB) are together trying to take over CPA.

Dexus has also announced that the consortium has struck a memorandum of understanding with GPT Group to sell certain CPA assets to GPT should the consortium acquire 90 per cent or more of the units of CPA.

The CPA assets have a combined value of $679 million.

CPPIB will also sell its stake in a shopping centre in Melbourne to GPT for $505 million.

Dexus and CPPIB had already indicated in their bidder’s statement that they would offer two of the CPA assets to GPT Group but have now added some other properties.

“As a consequence of the intended additional asset sales, the consortium has determined to vary the Dexus offer to give CPA unitholders the opportunity to elect to receive an alternative cash/scrip mix comprised of a larger proportion of cash, per CPA unit,” Dexus said in a statement after the share had closed on Monday.

GPT has also made a bid for CPA, but the responsible entity for CPA, Commonwealth Managed Investments Ltd (CMIL), has recommended that CPA unitholders reject the GPT bid because it (CMIL) says the Dexus offer is superior.

Dexus said the consortium’s alternative offer would comprise 84.96 cents in cash plus 0.3801 Dexus securities for each CPA unit.

Under the Dexus-CPPIB offer, CPA unitholders will still be able to choose the existing cash-and-scrip mix of 77.45 cents plus 0.4516 Dexus securities for each CPA unit.

Dexus said that the alternative cash-and-scrip mix was worth $1.237 and the original mix was worth $1.235, based on the Dexus security price on January 3, 2013.

Under the Dexus-CPPIB offer, CPA unitholders will also receive CPA’s distribution of 3.5 cents for the half-year ended December 31, 2013.

Under the agreement with the consortium, GPT will acquire CPA’s 100 per cent interest in 655 Collins St and 750 Collins St in Melbourne, CPA’s 50 per cent interest in 2 Southbank Boulevard in Melbourne and 50 per cent interest in 10 Shelley St in Sydney.

The total purchase price of the four assets is $679 million.

CPPIB has also agreed to sell its 50 per cent interest in the Northland Shopping Centre in Melbourne to GPT Group for $505 million, bringing the total value of the assets that can be acquired by GPT to about $1.2 billion.