GLOBAL - A consortium that includes the Canadian Public Sector Pension Investment Board and a subsidiary of Singapore sovereign wealth fund GIC looks set to acquire the Australian Charter Hall Office REIT for AUD$2.49 per unit (€1.96).
In a statement, Roger Davies, chairman of Charter Hall Office Management (CHOLM), which manages the REIT, said the offer represented “the most compelling and certain value proposition currently available” to shareholders.
His comments came at the end of negotiations, which resulted in a per-unit increase in the consortium’s offer to AUD$0.10.
The committee’s recommendation follows the rejection in October of a Macquarie-led bid for the company as “not adequate”.
To pass, the new proposal will need to be approved by 75% of unit holders at a mid-March meeting ahead of implementation at the end of the month.
The proposal as recommended by Davis’s committee carries with it a number of get-out options.
Although CHOLM’s independent director committee has recommended the deal to unit holders, it could still withdraw support in the event of a better offer.
The REIT, which has AUD$1.84bn in domestic assets under management, is in the process of selling US assets it values at $575m (€440.8m) to Beacon Capital Partners.
The proceeds from the US sale will be distributed to unit holders in a bid to sweeten the deal.
Any delay in the US sale process will leave unit holders liable to the acquiring consortium - which also includes Charter Hall Funds Management - for any debts.
However, according to the proposal, it will also provide grounds for CHOLM to call off the deal.
Canada’s Public Sector Pension Investment Board allocates 13% of its CAD5.3bn (€4bn) portfolio to real estate, though only 15.4% is invested in office.
Its largest sector investment - 28.6% - is in retirement homes.