CPPIB, Dexus make offer for $3.5 bln Australian office trust

Reuters

(Corrects headline to say the value of the trust is $3.5 bln,not the offer)

SYDNEY, Oct 11 (Reuters) - Australia's Dexus Property Group and the Canada Pension Plan Investment Board (CPPIB) onFriday made an initial offer for Commonwealth Bank ofAustralia's A$3.7 billion ($3.5 billion) listed officetrust.

The acquisition would give Dexus, Australia's largest officemanagement firm, a 26 percent share of the key Sydney primegrade office market and increase its office assets undermanagement by almost 50 percent to A$11.5 billion.

Dexus already has a 14.9 percent stake in the CommonwealthProperty Office Fund (CPA). The group and CPPIB areoffering A$0.68 a unit in cash and A$0.4516 a unit in stapledsecurities for the remainder of the trust.

The proposal offers CPA unitholders a headline offer priceof A$1.15 a unit.

Dexus shares were up 0.7 percent to A$1.05 in early trade.CPA shares had picked up 2.2 percent to A$1.18, whileCommonwealth Bank shares had gained 1.9 percent to A$72.16.

The deal would expand CPPIB's exposure to Australia's officeassets.

"The proposal is an excellent opportunity to expand ourAustralian core office portfolio and is in line with ourstrategy to invest in high-quality assets that are well positionin their markets," Graeme Eadie, senior vice-president and headof real estate investments at CPPIB, said in a statement.

A deal will need to be approved by Australia's ForeignInvestment Review Board (FIRB) and the Australian Competitionand Consumer Commission (ACCC).

If the deal goes through, CPA will become an unlisted fund,managed by Dexus and owned equally by Dexus and CPPIB.

($1 = 1.0575 Australian dollars) (Reporting by Jane Wardell; Editing by Ryan Woo)

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