CPA - Commonwealth Property Office Fund

Interesting article in todays Sydney Morning Herald BusinessDay by Carolyn Cummins in regard the takeover offers from Dexus and GPT. Worth a read in my opinion.

http://www.smh.com.au/business/dexus-set-to-up-the-ante-in-cpa-battle-20131120-2xvs0.html

Seems fairly balanced.

And the Chess battle continues. Dexus to play it's 14.9% holding as a blocking stake to any GPT acquisition and divestment of assets to GWOF. Dexus opened at $1.065. GPT opened at $3.52 (down $0.04 on yesterdays close, however volumes are not very high). Interestingly DXS did not try to match the GPT bid in their release.

Probably stating the obvious to any one following the CPA takeover battle.

1. CBA have terminated the exclusive deal with Dexus for due dilligence on the basis that Dexus did not match the offer of GPT or up the anti in the bid for CPA;
2. Notwithstanding 1 above, CBA have invited Dexus to continue with due dilligence within the same time frame as previously agreed;
3. Dexus is continuing with due dilligence advising the market that it is too early to determine the merits of their offer versus GPT's, considering both are on the basis of scrip and cash;
4. GPT contends that their offer is in the best interests of CPA share holders; and
5. Both Dexus and GPT increased in price today on fairly modest turnover.

It seems it is still too early to determine which offer the market favours. All the parties seem to be being very careful to appraise the market as to what is happening. CBA appears to be seen to be trying to act in the best interest of the CPA unit holders. It is almost as if the major players are wary of the potential for class action if their actions can be perceived as "self interest" rather than CPA unit holder interest. Interestingly the market for CPA today was still within the realms of GPT's offer, as if the market is not expecting a higher bid?

I'm first in line at $1.275

UMike said:

I'm first in line at $1.275

Click to expand...

You must have read the article in todays BusinesDay about the possibility of a foreign third party lobbing an increased bid for CPA. Given that most of the accumulation works on achieving an averaged price, you have every chance of getting your sell away. Then again if the third bidder doesn't lob and Dexus elects not to top the GPT offer you might be hanging out for a while. Good luck.

nulla nulla said:

You must have read the article in todays BusinesDay about the possibility of a foreign third party lobbing an increased bid for CPA. Given that most of the accumulation works on achieving an averaged price, you have every chance of getting your sell away. Then again if the third bidder doesn't lob and Dexus elects not to top the GPT offer you might be hanging out for a while. Good luck.

Click to expand...

That foreign bidder hasn't eventuated and the share price movement has been very static. It would appear that the market is not expecting a higher bid. More likely perhaps a rejig by Dexus with an argument that their bid is better than GPT's. GPT should be lodging their formal bidder statement this week, so we should see a few more specifics then be able to guage market reaction.



Not much point in commenting on trading this share now. It is sitting in a range mostly between $1.26 and $1.265 with minor deviations to $1.2575 and $1.27.

The sell down in the Aud$ dragged down both Dexus and GPT as foreign investors headed for the door with their funds. Dexus did a quick calculation as to how their bid and GPT's bid stacked up on the resultant drop in share prices and lobbed a revised bid for CPA of $1.27 based on scrip and cash, with a covering note as to why their bid was better than GPT's.



On Thursday/Friday of last week CPA started trading in the $1.28-$1.285 range as the market factored in an expectation of GPT coming back with a sweetened bid in the realms of $1.30. Then on Friday night, after close of business Dexus, announced that they have locked in a deal with the CBA for management rights of CPA at $41million subject to 50.1% acceptances of their revised offer. Surprisingly, today CPA seemed to peak at $1.28. No response, before market close anyway, from GPT and the market doesn't appear to be as sure of another bid? Then again the Aud$ dropped further today and this could also have impacted on CPA.

At this point I suspect that the only way GPT could win the battle for CPA is to make a cash offer of $1.27+ (no scrip). Even then they would have to deal with the 15% holding of Dexus and the CBA holding of roughly 10%. So far it seems that CBA is favouring the Dexus bid, after all they get $41 millon for the management rights from Dexus.

Done and dusted. VALE CPA.

Dexus won the bidding war when GPT didn't come out of their corner with a higher bid or a cash bid in the third round. Then Dexus did a sweat heart deal to onsell $2.2 million of the CPA assets to GPT if Dexus gets 100% of the CPA shares. GPT threw in the towel and in the absence of a better offer, the CPA directors recommended that CPA shareholders accept the Dexus offer.

Dexus is now mopping up the remaining CPA shares and GPT has a put and call option over various assets within a tight time frame of Dexus finalizing the CPA mop up.

CPA was very good to us over the last four and a half years.



P.S. Some times I wonder if GPT was serious about a full take-over of CPA. The possibility that they only took a blocking stake to get Dexus to the negotiating table in regard the CPA assets that GPT wanted, niggles at the back of my mind. They wouldn't do that....would they?

nulla nulla said:

P.S. Some times I wonder if GPT was serious about a full take-over of CPA. The possibility that they only took a blocking stake to get Dexus to the negotiating table in regard the CPA assets that GPT wanted, niggles at the back of my mind. They wouldn't do that....would they?

Click to expand...

This is a good insight. What made it worse was that GPT never actually took a stake. All they did was sign agreements with some hedge funds that agreed to sell to GPT if GPT's bid ended up the higher value offer vs DXS. So a meaningless position really. They did well to play the game and come out with a swag of assets.

On April 22nd, 2014, Commonwealth Property Office Fund (CPA) was removed from the ASX's official list following compulsory acquisition by DEXUS Funds Management Limited as trustee for DEXUS Office Trust Australia.