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Investa Office Fund (ASX: IOF) has confirmed it has entered into a takeover agreement worth $3.14 billion with US private equity group Blackstone.
After receiving the takeover proposal in early May 2018, the group, which operates some of the most high profile office buildings in Australia, has agreed to Blackstone's terms.
Under the agreement, Investa shareholders will be entitled to $5.25 per share, representing a premium of 2.4 per cent on Tuesday's closing price of $5.13 per share.
The directors of Investa have recommended shareholders accept the offer.
"The Directors of [Investa] unanimously recommend that IOF unit holders vote in favour of the Scheme, in the absence of a superior proposal and subject to an Independent Expert opining that the Scheme is in the best interests of IOF unitholders," said the company in a statement.
Initially, Blackstone offered $5.05 per share, but Investa negotiated an improved offer which was accepted on Wednesday morning.
Investa holds interests in 20 investment properties in the CBDs of most major Australian cities, with its portfolio valued to be worth approximately $3.97 billion. Its two premium properties are the Deutsche Bank Place on the corner of Phillip and Hunter Streets in Sydney the nearby 388 George Street.
The distribution from the takeover is expected to be paid to shareholders in August 2018.
Independent chairman of Investa Richard Longes says the takeover deal is an attractive one for shareholders.
"We are pleased to be entering into a binding Scheme Implementation Agreement with Blackstone today which provides IOF unitholders the opportunity to realise their investment in IOF at an attractive and certain price," says Longes.
The scheme is set to be implemented in late August 2018, conditional upon a number of matters including approvals by IOF and the Foreign Investment Review Board.
A shareholder meeting will be held in August to vote on the takeover bid. In order for the scheme to be implemented, shareholders must approve each resolution at the meeting by at least 75 per cent.
Blackstone has been chasing IOF for two years and renewed its takeover attempt after Cromwell Property Group's interest in the company faded and ultimately ended.
Shares in IOF are up 0.58 per cent to $5.16 per share at 11.08am AEST.
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Business News Australia
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