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Cromwell's Investa Office Fund pursuit ends with A$276M stake divestment

Cromwell Property Group decided to part ways with Investa Office Fund, or IOF, through the A$276 million divestment of its 9.89% shareholding.

Cromwell CEO Paul Weightman said in a statement that despite the IOF investment being "a profitable one," the company decided to off-load its entire stake in IOF — which caught Cromwell's attention in early 2016 and later in the year offered to take it over, a bid with seemingly more downs than ups — because it was clear that "a friendly transaction was unlikely to proceed, regardless of the price that we offered."

Cromwell said the selloff has an annualized equity internal rate of return of 18%, and that it intends to use proceeds from the divestment to reduce gearing and for other general corporate expenses.

In its statement, IOF identified Investa Property Group as the buyer of the stake under a A$4.65-per-security agreement. The 59.3 million IOF securities that Cromwell sold boosts Investa's interest in IOF to 19.95%.

IOF's biggest stockholder is Investa's Investa Commercial Property Fund. Investa CEO Jonathan Callaghan said the acquisition of IOF "further re-enforces the alignment" between the two companies' unit holders.

IOF and Investa Commercial were under the Investa platform that Morgan Stanley Real Estate exited in 2015.