Dexus signs deal to buy Investa Office Fund
Dexus Funds Management Limited is set to buy the Investa Office Fund (IOF), entering into a process agreement to acquire the fund today.
In a statement to the Australian Securities Exchange (ASX), Dexus said it had received an "unsolicited approach" from the advisers to the independent board committee of Investa Listed Funds Management Limited (ILFML), the responsible entity of IOF, to acquire the fund.
The deal values IOF at $3.52 billion.
"Dexus and IOF are highly complementary portfolios — both are focused on prime office properties in Australian CBDs," Dexus said.
"If implemented, the transaction would further position the group as a leading Australian commercial real estate company:
- Dexus and IOF are both owners of highly regarded, quality institutional grade portfolios. The transaction will solidify the combined group's position as a pre-eminent Australian CBD office owner and property manager for customers, security holders, and employees;
- Assets under management (AUM) would increase to approximately $23.4 billion, $16.6 billion of which would be invested in office property. This excludes the external valuations of approximately 35 properties across DEXUS's portfolio which are expected to be finalised and announced to the Australian Securities Exchange on or around 11 December 2015;
- Scrip and cash mix based transaction (80 per cent DXS scrip, 20 per cent cash, with an anticipated "mix and match" facility) implemented by way of an IOF Trust Scheme for 100 per cent of the IOF Units;
- IOF Unitholders would receive a premium of 7.4 per cent using an exchange ratio based on the DEXUS 10-day VWAP on 4 December 2015 and IOF closing price on 4 December, a 6.7 per cent premium based on the one-month VWAP of IOF and a 5.2 per cent premium based on IOF's Pro-forma NTA;
- Revenue and cost synergies are expected to be realised in the medium term with a significantly increased customer base and larger number of wholly owned assets; and
- Transaction is expected to preserve DEXUS's A-credit rating and maintain its balance sheet strength."
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