Blackstone and Oxford battle for Investa

Blackstone and Oxford battle for Investa

7 September 2018

United States private equity power house Blackstone has dramatically upped its bid for the Investa Office Fund (IOF) to more than $3.3 billion in a last bid attempt to knock Canadian rival Oxford Property Group out of the race, reports The Australian.

Earlier this week, Oxford shocked the market—and Blackstone—by lodging a left-field bid of $5.00 per unit for Investa, well ahead of Blackstone’s ”best and final” offer for the fund.

Blackstone immediately savaged the Canadian proposal, arguing that it was “clearly not” superior and lacked due diligence.

Blackstone argued it was “questionable” that Oxford would make a bid within a reasonable time and noted hurdles including Oxford needing its own investment committee’s approval, as well as the lack of certainty about debt and equity funding.

Not one to knock back a new suitor, the Investa board brushed aside Blackstone’s objections and announced it would adjourn a shareholder meeting set down for Thursday morning which was to vote on Blackstone’s bid.

The meeting was duly adjourned after less than five minutes and no date was set for its resumption.

Blackstone has now dug deep and thrown another $102 million into the ring to woo Investa into consummating a deal.

The Investa board, which had maintained its support for Blackstone’s previous offer even as it considered the Canadians’ highly conditional $5.50 offer, said it intended to work with Blackstone to give effect to the price increase, said the AFR.

“To the extent that agreement with Blackstone on the price increase can be reached, ILFML intends to seek judicial advice that it is justified in resuming the adjourned meeting and to approve the release of supplementary disclosure,” IOF said.

Among the conditions of its latest offer, Blackstone wants a break fee increased from $20 million to $33 million.

The heat is now back on the Canadian group to trump the Blackstone bid.

Oxford is the real estate arm of the massive OMERS pension fund, which has net assets of $C100 billion ($106 billion). The property arm has $C50 billion in assets under management and is now embarked on its maiden takeover battle.

Investa Office Fund owns a portfolio of $4.4bn worth of Australian towers, including a slice of Sydney’s Deutsche Bank Place.