Dexus Property Group and partner the giant Canada Pension Plan Investment Board appear to have won the battle for the $4 billion Commonwealth Property Office Fund (CPA), with rival GPT Group to walk away with a cache of properties worth $1.2 billion.
Both Dexus and GPT announced they had struck a memorandum of understanding last night after the sharemarket had closed.
The battle for CPA was hard fought with the winner to become one of the country's biggest office-tower landlords.
Under the revised offer, Dexus and CPPIB have put more cash on the table, and lowered the script component of their bid.
GPT gets four office buildings for $679 million: a half stake of 10 Shelley Street in Sydney, and 750 Collins Street, 655 Collins Street, and a half share of 2 Southbank Boulevard in Melbourne.
Also, GPT's wholesale shopping centre fund can buy 50 per cent of Northland Shopping Centre in Melbourne for $505 million from CPPIB.
In October, Dexus teamed up with one of the world's largest pension funds to launch the $2.7 billion hostile takeover bid for CPA.
The following month, GPT pitched a surprise cash-and-scrip play for CPA aimed at boosting its earnings and super-charging its ambitions to build up a $10 billion funds management empire.
While GPT does not win the entire CPA under the latest proposal, it does carve out a chunk of office towers.
Last year, Dexus/CPPIB offered two CPA office buildings -- 750 Collins Street and the half share in 2 Southbank Boulevard -- to GPT's wholesale office fund if the partners won 100 per cent of the units in CPA.
Dexus yesterday said the new bid equated to $1.272 a CPA share including the distribution, compared with its earlier offer of $1.27.
The company said the asset sales had allowed it to increase the cash component to 84.96 cents plus 0.3801 Dexus securities. Its earlier offer was 77.45 cents and 0.4516 Dexus securities.
Dexus also said it had posted out its bidder's statement, opening the offer for acceptances, with the offer to close on February 7.
The acquisitions are subject to a number of conditions, including Foreign Investment Review Board approval and due diligence, and are structured under a put and call option that terminates the deal if not exercised by September.
The acquisitions also depend on Dexus reaching compulsory acquisition in its CPA bid.
However, GPT has left its $3 billion bid for CPA open until January 24.
Dexus and GPT declined to comment further last night.
CPA owns 26 office properties and is run by Commonwealth Bank subsidiary Colonial First State Global Asset Management.
The takeover bid followed confirmation by Commonwealth Bank that it wanted to cut ties with its $20 billion property business.
In December, the independent directors of CPA rejected a $3 billion takeover bid from GPT Group in favour of a higher bid from Dexus and CPPIB.