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SYDNEY, Jan 14 (Reuters) - Australian property firm The GPT Group said on Tuesday it would not lift its bid for Commonwealth Property Office Fund (CPA), paving the way for a rival consortium led by Dexus Property Group to seal a deal.
GPT had until Tuesday to either match or beat a A$3 billion ($2.72 billion) offer from Dexus for CPA.
While the GPT offer remains open until Jan. 24, three major investors who gave GPT pre-bid acceptances are now free to switch allegiance to Dexus, a move expected by analysts.
GPT and Dexus earlier this month agreed an asset sale that analysts viewed as a consolation deal for GPT after a six-month takeover battle.
Dexus, CPA's preferred bidder, agreed to sell five office buildings in Sydney and Melbourne with a combined value of about A$1.2 billion ($1.08 billion) to GPT.
Backed by the Canada Pension Plan Investment Board (CPPIB), Dexus also proposed 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 A$1.270 offer.
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 Australia.
$1 = 1.1043 Australian dollars Reporting by Jane Wardell; Editing by Leslie Adler