The responsible entity of the fund, Commonwealth Managed Investments Limited (CMIL), is a wholly owned subsidiary of the Commonwealth Bank.
The board of CMIL issued a statement on the Australian Securities Exchange (ASX) advising CPA unit holders that no action is required of them “at this time”.
The non-binding proposal will offer $0.680 in cash and 0.4516 in Dexus securities per CPA unit. Based on the current Dexus trading price of AUD$1.04, this will equate to a headline offer price of AUD$1.15 per CPA unit. CPA will become an unlisted fund managed by Dexus if the proposal is implemented and would be owned equally by Dexus and CPPIB.
According to the ASX release, the mixture of stapled securities and cash will “provide CPA unit holders with both certainty of value and an opportunity to remain invested in a high-quality internally managed Australian office platform with strong growth prospects”.
If the proposal is implemented it will increase DEXUS’ office assets under management from $7.8 billion to $11.5 billion, with a 26 per cent share of Sydney prime grade office.
The ASX release by DEXUS said the proposal will enable the property group to combine two complementary office portfolios, enhance its strong third party funds management platform, generate accretion to funds from operators, position DEXUS as an A-REIT low-cost operator and maintain its financial strength.
CMIL company secretary Michelle Brady said the independent board committee of CMIL was currently considering the proposal and that no action was required by CPA unit holders at this time.
DEXUS has also sent a non-binding proposal to the Commonwealth Bank of Australia (CBA) explaining the facilitation of the proposal and transition of the management of CPA. Dexus said that it would make a cash payment to CBA and its relevant subsidiaries if the proposal is facilitated.
Dexus currently holds a 14.9 per cent share in CPA units.
