The Canadian Press
TORONTO - The Canada Pension Plan Investment Board says it has reached a friendly deal to acquire half the interest in a portfolio of 25 office properties in Australia for AUD$2.8 billion (C$2.74 billion).
CPPIB says it is teaming up with Dexus Property Group to acquire all of the outstanding units of Commonwealth Property Office Fund, known as CPA.
The deal, reached after the buyers raised their original offer to AUD$1.20 from $1.15 for all the units of CPA, is subject to final adjustments after a four-week period of due diligence and requires unitholder approval.
The deal will see holders of CPA units receive both cash and staple securities of Dexus, with the cash component in the neighbourhood of 73 cents.
The CPPIB will contribute half of the purchase cost, all in cash and equivalent in value to the Dexus cash and stock payment.
Commonwealth owns a portfolio of 25 office property assets, mostly in the Sydney and Melbourne areas.
The CPP Investment Board, one of the world's largest pension funds, invests money not needed by the Canada Pension Plan to pay benefits for some 18 million current retired contributors.
CPPIB says it had net assets of C$192.8 billion at Sept. 30, up from C$188.9 billion at the end of the previous quarter. Its commitment to the Australian real estate market was about C$3.2 billion before the latest deal.