The management board of Investa Office Fund, or IOF, will entertain both standing offers for the fund, and advised unit holders to take no action until it arrives on a recommendation in due time.
The review of the two options — taking a 50% stake in the Investa management platform for A$45 million, as previously offered by Investa Commercial Property Fund, or accepting Cromwell Property Group's A$4.85-per-share unbinding bid to take the fund private — will include new independent valuations of the fund's 20 assets. When the company reported its latest earnings results in February, its portfolio contained had 22 office properties with a book value of A$3.82 billion.
The fund's manager, Investa Listed Funds Management Ltd., hired Macquarie Capital and Allens to serve as its financial and legal advisers, respectively, to help evaluate the two proposals.
Investa Listed expects to call for a meeting of unit holders by the end of May to vote on the deal with Investa Commercial Property Fund taking on a half-stake in the A$8.5 billion management platform of the Investa office portfolio.
Meanwhile, the independent directors of Investa Listed said they have met with and are now willing to provide due diligence to Cromwell for a binding all-cash and fully funded agreement. The board will not, however, provide Cromwell with exclusivity or seek standstill obligations due to Cromwell's refusal to name its equity backers and the nonbinding nature of the current offer. The board also reiterated that there is "no certainty" a deal with Cromwell would emerge from their willingness to give due diligence access to Cromwell, a move that already marks a change from their previous stance.
Cromwell said separately that due diligence access was granted April 7 after it signed a confidentiality agreement.
Cromwell CEO Paul Weightman was quoted by The Australian in an April 7 report as saying that his company will only reveal its investors when a deal is final to prevent them from being "subject to lobbying." Industry sources reportedly told the paper that DEXUS Property Group and GPT Group are some of the backers, which Weightman is said to have denied.
As of April 6, US$1 was equivalent to A$1.32.