Property group GPT Group will not increase its offer for the Commonwealth Property Office Fund (CPA) nor extend the offer period.
GPT’s offer of 0.141 GPT securities and 75.32 cents in cash for each CPA unit – valuing CPA at around $2.95 billion at the current price of GPT securities – remains open until January 24.
Property investor Dexus Property Group and the Canada Pension Plan Investment Board (CPPIB) together are also trying to take over CPA.
The responsible entity for CPA, Commonwealth Managed Investments Ltd (CMIL), has recommended that CPA unitholders reject the GPT bid because it (CMIL) says the Dexus-CPPIB offer is superior.
On January 13, the GPT offer had received acceptances totalling 3.74 per cent of CPA units.
Including the 7.97 per cent relevant interest under the pre-bid agreements, GPT’s relevant interest in CPA units is 11.72 per cent.
GPT chief executive Michael Cameron said on Tuesday that the decision not to increase the consideration under the GPT offer or extend the closing date followed careful assessment of the competing proposal for CPA, and reflected a continued focus on GPT’s strategic priorities.
Last week, Dexus and CPPIB struck a memorandum of understanding with GPT Group to sell certain CPA assets to GPT should the consortium acquire 90 per cent or more of the units of CPA.
The CPA assets have a combined value of $679 million.
CPPIB will also sell its stake in a shopping centre in Melbourne to GPT for $505 million.
Mr Cameron said the agreements with Dexus and CPPIB would help GPT diversify its portfolio of assets and could result in GPT growing its funds under management by about $1.2 billon.
“High-quality office and retail assets at fair prices are limited in supply, and we are very pleased to secure these properties off-market,” Mr Cameron said.
He said GPT still had significant financial capacity to buy back GPT securities and to pursue other opportunities.