Singaporean real estate giants Mapletree and Ascendas are the latest names to emerge as contenders for Investa Property Group’s $9 billion commercial property empire.
The Morgan Stanley-backed business is yet to be officially launched for sale and the company has kept schtum on its strategy, despite a flurry of speculation about prospective bidders and the recent appointments of several financial advisers to separate parts of the business.
This stance is likely to change shortly.
As The Australian reported last week Investa’s directors are set to sign off on the structure of a selldown at a board meeting today, just two days before the group’s listed vehicle unveils its results.
The directly owned properties are likely to fall under the hammer first, a decision that is expected to trigger bids for the entire business including the assets and management platform that oversees IOF and its unlisted vehicle, ICPF.
According to sources Investa’s portfolio is valued at $2.3 billion.
However a thicket of pre-emptive rights controlled by IOF and ICPF threaten to complicate this deal, potentially pitting the independent directors of those entities agains the interest of the Morgan Stanley-dominated parent.
Investa’s managment rights for its entire platform are valued at $130 million and $180 million and the group has given a puclic undertaking it will offer IOF the opportunity to internalise teh vehicle.
The listed landlord has the right to match an offer for the platform and holds a call option over the management rights once the value of its portfolio hits $3.5 billion. Currently that figure sits at $3.1 billion while its unlisted stablemate oversees $3billion of assets.
But IOF’s aspirations to take charge of its own destiny may unravel if a suitor tables a bid for the entire business, as is widely expected.
The Australian has already reported that both Blackstone and LaSalle Investment Management are targeting a full takeover.
If Mapletree and Ascendas join the fray, the pricing may leave IOF unable to compete for the management rights.
A steep offer for Investa, which owns a number of iconic buildings in Australia, including Deutsche Bank Place in Sydney, would deliver a welcome result for Morgan Stanley and the investors in its private equity-style funds that bought the business in 2007 at a heady price. But the mooted loss of control of the listed vehicle threatens to leave a sour taste among the group’s other stake holders.