CROMWELL Property Group's (ASX: CMW) hostile takeover bid for Investa Office Fund (ASX: IOF) has gathered momentum with a new $3 billion cash bid.
The new bid was announced by IOF after the market closed on Tuesday and revealed Brisbane-based Cromwell has offered $4.85 per share in an unsolicited non-binding proposal to acquire all units in IOF. Shares in IOF closed at $4.72 before the announcement.
The offer also includes a 10c per share distribution for the half year ending June 30, 2017, and is subject to due diligence for 40 days.
Cromwell CEO Paul Weightman wrote to IOF chairman Richard Longes, saying the offer will be funded through a combination of equity and debt and will involve his company and "a number of global real estate investors".
"Cromwell believes that its $4.85 all cash proposal is a superior proposal to the internal restructure being contemplated," Weightman says, referencing Investa's announcement this week that it was negotiating the acquisition of 50 per cent of one of its related entities.
"A failure to permit this due diligence will effectively close off the all cash proposal to securityholders."
Cromwell's raid began in earnest in November 2016 when it offered $4.45 per share to buy IOF in a deal worth $2.7 billion.
The current $4.85 per share offer is a nine per cent increase on the initial offer of $4.45.
That hostile takeover bid fell through when IOF rejected it on the grounds it was not funded, while Cromwell took a back handed swipe at its target, saying it failed to disclose full details of its financial position.
IOF confirmed the latest offer and said it was being considered.
"The independent directors have not yet formed a view on the merits of the proposal," IOF said in a statement released to the ASX.
"The independent directors propose to engage with Cromwell in relation to the proposal including its terms and conditions and the disclosure of the identity of the proposed equity investors."
Investa owns around 22 of Australia's largest office towers in capital cities, with government and blue chip tenants, and has a complicated ownership structure.
Its responsible entity, Invest Listed Funds Management Limited owns around 8 percent of the company while Cromwell owns around 9 per cent, which it bought in April 2016 to scuttle a Dexus Property Group bid for IOF.
Both Cromwell and Investa are trading up on the ASX; Cromwell at $0.97 up 1.04 per cent and Investa at $4.80 up 1.80 per cent as of 1:05pm AEST.
Business News Australia
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