In the long-standing bidding war to acquire Investa Office Fund (ASX: IOF), bidder Blackstone gets 4 days to match the higher bid of rival Oxford. This comes after Canadian Oxford Properties Group tabled binding offer to its latest $3.4 billion bid quoted on 13 September 2018.
In September, Oxford, the real estate division of the Canadian pension fund OMERS and the U.S. private equity giant has placed an acquisition bid of $5.60 cash per IOF unit, 8 cents higher what Blackstone has proposed to IOF. After the market close on 12 October 2018, Oxford stated this offer to be binding.
ILFML, the responsible unit of Investa Office Fund advised Oxford’s proposal as a most ‘superior offer’ the Investa Office Fund has received so far. Therefore, it stated that since Oxford has placed a higher offer than rival Blackstone, in order to acquire 100% units in IOF, Blackstone needs to match the Oxford’s proposal or otherwise ILFML will finalize Oxford’s proposal and enter into a scheme implementation agreement with it. The period to match superior offer of Oxford is fixed at 4 business days, expiring on 18 October 2018. While, the initial bid placed by Blackstone in May was $3.08 billion.
Further, ILFML stated that it is in line with scheme implementation agreement it has entered into with Blackstone and there is no obligation on the bidder to raise its bid. It is completely on Blackstone’s discretion that if it wants to match the superior bid placed by rival Oxford and secure complete stakes in IOF or it decides to let go the proposal.
Moreover, the all cash consideration bid placed by Canadian Oxford represents a 23.1% premium to IOF unit price of $4.55 at which rival Blackstone first proposed the bid in May. In a binding letter Oxford stated that proposal remains subject to unanimous recommendation of ILFML’s Directors and execution of scheme implementation agreement. However, Oxford has already become the IOF’s largest unitholder as it acquired 19.99% of the IOF units from Investa Commercial properties Fund (ICPF) on 9 October 2018.
In a closing statement, ILFML advised IOF Unitholders to take no action as of now. Further, waiting for Blackstone to match the bid in given timeframe, the ILFML Directors have unanimously recommended the Blackstone Proposal.
With this update, the share price of IOF has surged by 0.362% or $0.020 to $5.540 on 15 October 2018 (1:43 PM AEST). The stock has seen a performance change of +23.77% over the past one year. Whereas, it is currently trading at a PE of 6.370 x with market capitalization of $3.3 billion.
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