This article is from the Australian Property Journal archive
ATTENTION has turned to Cromwell after shareholders of takeover target Investa Office Fund rejected Investa Listed Funds Management Limited (ILFML)’s proposal to partially internalise the Investa Office Management Platform.
IOF’s $45 million proposal was to acquire a 50% interest in the Investa Office Management Platform in equal partnership with the Investa Office Commercial Property Fund (ICPF).
The Investa Office Management Platform oversees around $10 billion in office and commercial assets.
The result at the extraordinary general meeting held in Sydney yesterday is the latest chapter in a long-running saga that recently saw a frustrated Cromwell describe the proposal as “a worst of all worlds” outcome for IOF investors.
ILFML said the vote was defeated with 55.97% against and 44.03% for.
Cromwell has a 9.83% stake in IOF, making it the largest single unitholder and which it used to vote against the proposal.
It had a $2.7 billion acquisition proposal rebuffed last year that is since bumped up to $3 billion. The revised bid was at $4.85 per share and potentially complicated by IOF’s 5.0% portfolio uplift earlier this month following revaluations.
The $182.9 million increase on 20-property portfolio took its net tangible assets to $4.79 per share, but Cromwell’s bid takes in IOF’s forecast 10c dividend for this half.
Investa Group chief executive officer, Jonathan Callaghan, said that Investa had initially committed to offering 50% of the Management Platform to IOF unitholders in 2011, and re-affirmed that commitment in March 2016.
“Investa offered the opportunity for joint ownership once the agreed conditions precedent were reached and we are pleased that IOF unit holders have finally had the opportunity to decide for themselves if they wished to acquire 50% of the Management Platform.”
Callaghan said that Investa respected the views of the majority of the voting IOF unitholders, and assured all unitholders that Investa would continue to manage IOF with the same commitment and dedication it has applied since acquiring management in 2011.
“Investa is proud of the performance of IOF under its management where it has consistently outperformed the ASX A-REIT 200 Index and its peers.”
In a statement Investa said IOF unitholder return has outperformed that of the S&P/ASX 200 A-REIT index at 16.7% versus 13.7% on an annualised basis since April 2011.
“Cromwell should clarify for IOF unitholders the status of its potential all cash offer for all of the units in IOF,” it said.
Speculation had mounted last week that IOF would postpone this yesterday’s EGM, prompting Cromwell to pre-emptively state, “the related party proposal should be completely withdrawn and the Board of IOF should not waste another cent of unitholders’ money on it”.
Cromwell had upped its aggressive opposition after CGI Glass Lewis joined ISS as international proxies against the IOF proposal last week.
It said it would be voting against the related party proposal because “it results in IOF acquiring future uncertainty, embeds questionable governance practices, and reduces investor value both now and in the context of any potential future third party acquisition opportunity.”
Australian Property Journal
