Investa Commercial Property Fund (ICPF) has confirmed it is selling 50% of its management platform to Macquarie Capital Real Estate Investments (MREI), casting doubt over a separate bid by Blackstone to take over Investa Office Fund (IOF).
As reported last week, Macquarie has been in negotiations to acquire a stake in Investa Office Management Holdings, opening up the possibility of a return to real estate fund management in Australia.
The platform manages AU11bn worth of Australian office towers, including assets owned by ICPF and Investa Office Fund (IOF).
Blackstone’s AUD3.1 billion (€2bn) bid for IOF could be disrupted by the change in ownership.
ICPF, which is IOF’s single largest shareholder (it owns 19.99%), has written to the entity responsible for IOF, Investa Listed Funds Management, to confirm that, following the transaction, it could vote on Blackstone’s takeover offer.
IOF unitholders are due to vote on the Blackstone offer on 21 August.
ICPF’s ability to vote would mean it has a material influence on whether the Blackstone takeover gets across the line, a source told IPE Real Assets.
A leading stock analyst, Michael Vincent of CLSA, agreed. In a client note he said that, in the event ICPF that can vote, “the scheme at the current AUD5.15 bid price will be blocked”.
Blackstone will require approval from 75% of those who vote at next week’s meeting.
The source told IPE Real Assets that at least two of three proxy firms involved have indicated they will vote against the deal, which has been described as “unfair but reasonable” by an appointed independent expert.
He added that some fund managers, including APN Asset Management, have been vocal in their opposition to the deal, which they claim undervalues IOF.
Proxy advisory company ISS is supportive, but CGI Glass Lewis and Ownership Matters are opposed to acceptance of the bid.
ICPF have not yet decided whether to vote for or against, said the source.
Opinion is, however, divided on whether ICPF will actually be allowed to vote on the bid under existing corporation regulations.
CLSA’s Vincent said: “Based on our understanding of the law, we would be surprised if ICPF became eligible to vote given it continues to have an economic interest in the management platform.”
Analysts believe Blackstone will have to improve its offer to win over more shareholders, including ICPF.
The price of Macquarie’s investment in the Investa platform was not disclosed. Last December, the platform was valued at AUD90m.
In a statement to the Australian stock exchange today, Investa CEO Jonathan Callaghan said the investment by MREI made excellent strategic sense.
“MREI brings a proven track record of growing long-term value of management platform investments and has complementary skill sets we can leverage,” Callaghan said.
“Further, MREI’s strong capital raising and investment capability is expected to create future partnership opportunities.”
It is believed Macquarie looks to the investment as an opportunity to invest in the best-in-class specialist manager and to leverage off its expertise and management platform.
Macquarie’s negotiations with ICPF began nine months ago, predating the Blackstone offer.
ICPF has a strong investor base of Australian superannuation funds, and it is thought that Macquarie will bring in its global capital market skills to further broaden ICPF’s capital sources.