Dexus responds to Takeovers Panel declaration

The Australian Shareholders’ Association has weighed in on the battle for the $2.5 billion Investa Office Fund, ahead of a vote on Friday on a merger proposal by Dexus Property Group, reported The Australian.

The association has criticised the issue of misleading documents by the owner of IOF’s manager in the lead-up to the meeting.

The Takeovers Panel on Friday ruled the documents sent out by the manager opposing the merger, which is favoured by IOF’s independent directors, were unclear, misleading and incomplete and ordered them to be reissued, as well as the removal of an alternative proxy form, said the report.

“It is disturbing that retail unitholders have been sent inadequate information, including a misleading proxy form, and just two days before proxies close will receive more information for them to consider," Diana D’Ambra, chairman of ASA, was quoted as saying by the newspaper.

“We urge IOF retail unitholders to ensure they express their views by voting.”

Fresh disclosures by Investa managing director and chief executive, Jonathan Callaghan, noted a declaration of unacceptable circumstances and orders made by the panel.

The consequences of a loss of IOF’s management, including losing close to $20 million of fees annually, if the Dexus proposal goes ahead, have now been disclosed.

The Dexus proposal still faces a hurdle.

The panel has not prevented Morgan Stanley Real Estate from voting its 8.9 per cent stake in IOF, most likely against the merger.

The Panel's declaration is in response to an application to the Panel made by DEXUS RE on March 21, 2016.

"The Panel‟s declaration of unacceptable circumstances in relation to the matters described vindicates the action taken by DEXUS.

"We note the Panel decided not to interfere with the voting rights attached to IOF units with regard to the Morgan Stanley Real Estate Investing entities.

"DEXUS RE encourages all IOF Unitholders to express their opinion on the DEXUS Proposal at the forthcoming meeting of IOF Unitholders at 10.00am, Friday 15 April, 2016." 

Meanwhile, the chances of a consortium including Mirvac, Blackstone and China Investment Corporation (CIC) making a bid for Investa Office Fund appears to be all but dead in the water, according to the Australian Financial Review.

That would leaves Dexus Property Group best placed to win the $3.5 billion portfolio at a shareholder vote on Friday. 

But the AFR reported, citing sources, that DEXUS is in talks with some of the consortium to sell some assets. 

In a similar move, when it bought Commonwealth Property Fund back in 2014, Dexus did a deal in which it sold rival bidder Capri a $1.2 billion "consolation prize" of several assets to effectively take GPT out of the race. The properties were acquired at valuation.