SYDNEY Jan 7 Shares in two rival bidders for
Australian office property developer Commonwealth Property
Office Fund (CPA) rose in Sydney on Tuesday after the
pair agreed a billion-dollar asset sale, paving the way for the
end of a takeover battle.
Under terms of the accord announced in filings late on
Monday, CPA's preferred bidder, a consortium led by Dexus
Property Group, will sell five office buildings in
Sydney and Melbourne with a combined value of about A$1.2
billion ($1.08 billion) to its rival property firm, The GPT
The agreement, subject to the Dexus consortium acquiring
over 90 percent of CPA, is essentially a consolation prize for
GPT as Dexus and its partner finalise a A$3 billion deal
recommended by CPA to its investors in mid-December.
GPT shares climbed 2.6 percent on Tuesday, trading at A$3.58
by 0256 GMT. Dexus rose 2.2 percent to A$1.02. CPA dropped back
0.6 percent to A$1.24, reflecting the market's view that
Monday's agreement signals the end of the takeover battle.
"There is a bit of a concession by GPT to walk away from
this, and the concession is that they will get five really nice
assets," said IG market strategist Evan Lucas.
Both Dexus and GPT are large, diversified firms keen to lift
their exposure to high-yielding Australian office real estate.
CPA owns 26 office buildings in major business districts across
Backed by the Canada Pension Plan Investment Board (CPPIB),
Dexus also said on Monday it's proposing an alternative offer of
A$0.8496 cash and 0.3801 Dexus securities per CPA unit. That
provides a bigger proportion of cash compared with the original
A$0.7745 cash and 0.4516 securities.
CPA investors will be able to choose either the alternative
offer, which values each CPA unit at A$1.272, or the original
($1 = 1.1159 Australian dollars)
(Reporting by Maggie Lu Yueyang; Editing by Kenneth Maxwell)