After close to 18 months in a long drawn-out battle, the immediate future of the $2.5 billion listed Investa Office Fund was sealed in less than 25 minutes.
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In a meeting room in the basement of the Radisson Blu hotel in Sydney, about 60 unitholders, investment bankers, public relation advisers, media and IOF staff, gathered to hear a short speech from the independent chairperson of the IOF independent board committee, Deborah Page, who declared that there was not enough proxies received to get the DEXUS cash and scrip offer over the line.
DEXUS, run by Darren Steinberg, needed more than 75 per cent of votes, but Morgan Stanley, with 8.9 per cent and newcomer Cromwell with 9.8 per cent, voted against the offer. Mr Steinberg has said through the whole process that win or lose, its business as usual for DEXUS.
Shaw & Partners said they did not see the "No" vote as a big loss for DEXUS.
"The potential earnings per security impact was relatively modest at 2 per cent per annum, although we do acknowledge some "additional" lost opportunities, including the potential to redevelop some adjacent IOF/DEXUS assets in Sydney into a bigger and/or better use over time," the broker said.
The IOF independent board approached DEXUS last year to strike a deal that it felt was "in the best interest" of IOF unitholders.
The IOF meeting was held in the same room as another Investa meeting a decade ago, when the former chief executive Chris O'Donnell announced the purchase of Clarendon Homes. A few years later, Investa went through a restructure, which eventually led to Morgan Stanley buying the overall platform.
In early 2015 Morgan Stanley put the Investa platform up for sale, with the last tranche being the management control of IOF.
But with only one dissident shareholder making a speech/statement, the long takeover process was all over in 20 minutes.
As it stands, the current manager, Investa Office Management, otherwise called Investa Commercial Property Fund, run by Jonathan Callaghan, will keep hold of the reins.
IOF owns a quality Australian-focused office portfolio, including the recently acquired 75 per cent interest in 420 George Street, Sydney.
Ms Page said after the meeting that it had been "a highly unusual" takeover process, which "could have been handled better".
"Im a professional director and we have all been diligent in how we have gone about things," Ms Page said.
By yesterday Investa had installed four new independent directors, Richard Longes, the former chairman of GPT Group, Robert Seidler, John Fast and Geoff Kleemann. Mr Callaghan was re-instated as the Investa chief executive and executive director.
But the directors now have to contend with a new unitholder, Cromwell. Despite speculation, Cromwell's chairman, Geoff Levy, said the group "currently has no proposal to put to the IBC".
Cromwell crashed the DEXUS party at the 11th hour with the surprise purchase of a 9.8 per cent stake in IOF.
According to CLSA analysts, while surprising, this move is consistent with Cromwell's strategy to develop assets under management.
"CMW's intentions are not clear, but it may seek to take control of IOF with its major shareholder Redefine [25.5 per cent] and other capital partners in a new fund or use this as a blocking stake to negotiate with DEXUS for assets," CLSA analysts said.
