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Cromwell says unsolicited offer better than IOF's restructuring plan

Cromwell Property Group said its revised offer to take over Investa Office Fund, or IOF, is superior to the fund manager's plan to buy a 50% stake in the bigger Investa office management platform.

IOF said Cromwell submitted an unsolicited, indicative and all-cash nonbinding proposal to acquire the fund for A$4.85 per share, which includes an expected per-share distribution of 10 Australian cents for the half year ending June 30. The offer is 9% higher than its initial A$4.45 per share offer and represents an 8% premium to the A$4.49 per share net tangible asset price of IOF, as at Dec. 31, 2016.

Some of Cromwell's conditions for the offer to be binding include access to due diligence and a 40-day exclusivity period. It said it will fund the offer through equity and debt.

IOF's independent directors are yet to issue a recommendation on Cromwell's proposal, or decide on the offeror's request for due diligence information, a request that the board has denied repeatedly since November 2016. The directors repeated an earlier statement that they are open to discuss the proposal with Cromwell, which should include the latter's disclosure of the identity of its proposed equity backers.

Recently, IOF said its board decided to pursue negotiations for a half-stake in Investa Office Management Holdings Pty. Ltd., a platform that manages a A$8.5 billion office portfolio. The deal is expected to see IOF pay A$45 million for the interest.

As of April 3, US$1 was equivalent to A$1.32.