EUR 850.00 For Business Accounts Only

Morningstar | Corporate Action: Vote in Favour of Blackstone Offer for Investa

U.S. multinational private equity asset manager, Blackstone Group, is proposing to acquire all the units in Investa Office Fund by way of a trust scheme, with Investa Office Fund unitholders scheduled to  vote on the proposal on  Aug. 21, 2018. We believe the offer price of AUD 5.15 per unit represents a good outcome for investors and recommend unitholders in Investa Office Fund vote in favour of the proposal.

The proposal has been unanimously recommended by the directors of Investa Listed Funds Management Ltd, the responsible entity of Investa Office Fund. The proposal has also been assessed as in the best interests of securityholders by an external independent expert engaged by Investa Listed Funds Management Ltd. The directors of the responsible entity recommend Blackstone’s proposal in the absence of a higher offer.

Blackstone's offer, made on May 28, represented a 13% to Investa's previous closing price of AUD 4.55 per unit. Since then, Investa has had its entire portfolio revalued, resulting in a net tangible asset, or NTA, increase of AUD 0.53 per unit or 8% to AUD 5.47 from AUD 4.94. Even though the offer price of AUD 5.15 per unit is at a 6% discount to the most recent NTA we still see the offer price as compelling. First, the upwards revaluation of Investa's assets is premised on a wide range of  assumptions, many of which may not come to fruition. Second, many other Australian REITs are trading at discounts of 5%-10% to the NTAs indicating investment markets are generally discounting the values ascribed to commercial properties by professional valuers.