Tensions are rising over Dexus Property Group’s $2.5 billion merger bid for listed rival Investa Office Fund, with fund staff voicing their opposition to the deal.
A letter, revealed online by The Australian, that was addressed to IOF’s independent board committee, says the staff of Investa Office are dismayed over its decision to pursue a merger with the office property giant.
The letter states that at IOF’s annual general meeting on November 30 the board committee was at pains to acknowledge management’s dedication and commitment, providing a market-leading fund, and the asset and management services of IOF.
“Furthermore, the independent board committee and representatives of IOF have, over the past 12 months, consistently and repeatedly represented their desire to retain the platform and expressed their ongoing gratitude and support for the platform’s staff,” the letter says.
IOF chairwoman Deborah Page said staff rumblings would not affect its agreement with Dexus. “The IBC has assessed all options objectively and in recommending the proposal from Dexus the IBC was acting in the best interests of its unitholders,” she said.
“The IBC recognises that a merger, if approved by unitholders, will impact staff and this weighed heavily on the independent directors.”
The letter, signed “The Staff of Investa Office”, says the recent decision flies in the face of representations and demonstrates a lack of regard for those who have worked for the benefit of IOF investors. It notes IOF’s shares had gained 50 per cent since 2011, when the management rights were assumed, and argues for a transaction that will keep the Investa Office platform intact.
“The staff are united in its opposition to the proposal and calls on the committee to adhere to previous representations and to pursue a joint path of internalisation with its stablemate, Investa Commercial Property Fund, or at the very least maintain the status quo of external management with services provided by the existing platform,” the letter says.
Dexus yesterday unveiled revaluations on 40 of its 102 properties in a move that boosted the value of its portfolio $450 million.
This article first appeared in The Australian Business Review.