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IOF in advanced talks for 50% stake in Investa management platform

The manager of Investa Office Fund, or IOF, is in advanced discussions for a 50% stake in the A$8.5 billion management platform of the Investa office portfolio.

Investa Listed Funds Management Ltd.'s independent directors and advisers determined that a true joint venture agreement with Investa Commercial Property Fund, or ICPF, will benefit IOF unit holders. Terms of the transaction are yet to be finalized, according to a release.

The disclosure concludes an operational and governance review that the IOF independent board undertook to see how it and Investa Office Management Holdings Pty. Ltd. could work together. When ICPF closed its acquisition of the platform in March 2016, it gave IOF an option to buy the 50% stake. At the time, IOF did not exercise the option as it was in a merger deal with DEXUS Property Group, which ultimately failed to materialize.

IOF and ICPF in December 2016 agreed to extend a previous deal saying that if the sale is completed before May 31, IOF will pay A$45 million, subject to adjustments, for the stake.

A 50% interest in the office management platform is expected to reconfirm IOF and ICPF's strategic relationship, and improve the actual and perceived independence of the IOF management and board, among other objectives.

IOF shareholder Cromwell Property Group is in the middle of pushing for the privatization of IOF.

As of March 31, US$1 was equivalent to A$1.31.