Property management firm Dexus has entered merger talks with Investa Office Fund, offering an implied price that would value the target company at more than $2.5 billion.
The implied per unit price of $4.11 would represent a premium of 7.3 per cent over the Investa's last close at $3.83 a share.
Dexus would pay a mix of scrip and cash for the takeover. Consideration under the proposal would comprise 0.424 Dexus securities and $0.8229 in cash for each Investa Office Fund unit.
If the deal proceeds, the combined entity would have assets under management of $23.4 billion, with $16.6bn tied up in office property.
Dexus has a market cap of $7.6 billion.
"Revenue and cost synergies are expected to be realised in the medium term with a significantly increased customer base and larger number of wholly owned assets," Dexus said.
The two parent companies, Dexus Funds Management and Investa Listed Funds Management, have struck a deal to provide a two-week exclusivity period for due diligence.
Dexus has also suspended its stock buyback program in light of the bid.