The Commonwealth Bank of Australia accepted the AUD 2.83 billion or USD 2.66 billion bid of the Australia-based Dexus Property Group and the Canada Pension Plan Investment Board or CPPIB. The offer for the banks listed trust was increased to AUD 1.2052 per share in cash and stock from its last month's bid of AUD 1.15 per share. This was based on a regulatory filing by Dexus, the largest listed office landlord in Australia.
The statement also showed that due diligence was set to be done in the next four weeks. A binding agreement among the parties would need to be accomplished by December. The two companies revised their offers after the Commonwealth Property Office Fund rejected their earlier proposal on October 14. Their first offer represented a bid that was equal to the net tangible assets or NTA of the fund when it was made. Since that time, the fund's NTA had increased to AUD 1.19 per share.
In August, Dexus said it would be purchasing a 14.9% stake in the fund. After the takeover, it would own and manage a quarter of the commercial real estate properties in Sydney. Meanwhile, the acquisition would increase CPPIB's existing CAD 5.8 billion or USD 5.5 billion investments in Australia.
According to Winston Sammut, the Managing Director of Maxim Asset Management Ltd, Dexus increased their offer since the valuations increased the worth of some properties which affected the NTA. He told Bloomberg, "I don't have a problem with the price. If anyone knows the real value of CPA, it would be Darren Steinberg." Steinberg is the Chief Executive Officer of Dexus. He also worked as the Managing Director of the Commonwealth Property Office's Manager before he got appointed to his new post in March last year.
Dexus said that the Commonwealth Property Office's Board of Directors had said that they would be recommending the proposal to shareholders if no other superior proposal would be given.
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