After a long and intense tussle, Canada’s Oxford Properties has won the multi-billion dollar battle for control of Investa Office Fund (IOF).
IOF’s independent directors yesterday unanimously recommended the Oxford Properties proposal to acquire IOF for $5.60 a unit – that values IOF at $3.35 billion.
That was after rival US fund manager, Blackstone failed to lift its bid past that of Oxford, despite being given the chance to do so four days ago by those IOF directors.
Blackstone, which kicked off the bidding war earlier this year, had until yesterday to make a bid at either the same price as Oxford or even higher.
In an ASX notice, Blackstone advised the IOF board that it will not provide a matching or superior offer to the Oxford Proposal.
As the IOF independent board has determined that the Oxford Proposal is a ‘superior proposal’ to the Blackstone proposal, the board has now withdrawn its recommendation of the Blackstone proposal.
Investa Listed Funds Management Limited (ILFML- the responsible entity for IOF) said in yesterday’s statement that it had terminated the Blackstone scheme implementation agreement and has entered into a scheme implementation agreement with Oxford in relation to the Oxford Proposal.
“The Directors of ILFML unanimously recommend that IOF unitholders vote in favor of the Oxford Proposal, in the absence of a ‘superior proposal and subject to the independent expert concluding that the Oxford Proposal is in the best interests of unitholders.
Oxford’s offer is conditional upon a number of matters, including unitholder, court and Foreign Investment Review Board approvals. It also has a provision for a break fee of about $33.5 million in certain circumstances.
“Subject to these same qualifications, each of the ILFML Directors intends to vote all IOF Units that they hold or control in favor of the Oxford Proposal.
“The change in the ILFML Board’s recommendation will give rise to an obligation to pay a break fee of approximately $32 million to Blackstone under the Blackstone scheme implementation agreement.”
ILFML said it has appointed KPMG Corporate Finance as the independent expert to prepare a report opining on whether the Oxford Proposal is in the best interests of IOF unitholders. The independent expert’s report will be included in the explanatory memorandum to be sent to IOF unitholders.
IOF ended at $5.55 yesterday.