Investa Office Fund - Panel Receives Application

The Panel has received an application from Dexus Funds Management Limited¹ in relation to the affairs of Investa Office Fund.

Details of the application, as submitted by the applicant, are below.

A sitting Panel has not been appointed at this stage and no decision has been made whether to conduct proceedings. The Panel makes no comment on the merits of the application.

Details

Dexus has proposed a trust scheme to acquire Investa Office Fund.² On 18 December 2015, an implementation agreement was executed in respect of the acquisition by Dexus of 100% of the units in Investa Office Fund.

The responsible entity of Investa Office Fund was a company in the Morgan Stanley Group.³ Investa Office Fund also had a separate management agreement with another company in the Morgan Stanley Group. On 4 March 2016, Morgan Stanley completed a "Platform Sale Agreement" under which the responsible entity and the manager of Investa Office Fund were transferred from Morgan Stanley to ICPF Holdco Pty Limited, a subsidiary of a company stapled to Investa Commercial Property Fund (an unlisted scheme).

Morgan Stanley has a relevant interest in approximately 11.8% of the units in Investa Office Fund, of which 8.9% was transferred to Post Sale Portfolio Issuer Pty Ltd as an internal transfer within the Morgan Stanley Group from the entity that was being sold under the Platform Sale Agreement on 1 March 2016.

Investa Office Fund's responsible entity had established an independent board committee to consider the Dexus proposal. That committee had recommended that unit holders in Investa Office Fund vote in favour of the Dexus proposal at a meeting of unit holders to be held on 8 April 2016. That meeting will consider a resolution under item 7 of section 611⁴ and a change to the Fund's constitution to give effect to the Dexus proposal.

Investa Office Management⁵ opposes the Dexus proposal.  Its holding company has published information to unit holders in Investa Office Fund that included a pre-filled proxy form to vote against the resolutions at the unit holders' meeting on 8 April.

Dexus understands that Morgan Stanley intends to vote the 8.9% parcel held by Post Sale Portfolio Issuer against the Dexus proposal, but submits that it and companies in the Investa Commercial Property Fund Group are associated.

Dexus has applied for a declaration of unacceptable circumstances. It submits (among other things) that:

1. there are information deficiencies concerning the nature of the interests of parties to the Platform Sale Agreement
2. substantial holder notices did not comply with s671B because they did not include a copy of the "Platform Sale Agreement" under which the responsible entity and the manager of Investa Office Fund were transferred from Morgan Stanley to the Investa Commercial Property Fund Group and
3. the manager of Investa Office Fund has acted in a way that prevents unit holders in Investa Office Fund having a reasonable and equal opportunity to participate in any benefits of the Dexus proposal. This includes by sending unit holders a pre-filled proxy form for the forthcoming unit holders' meeting to vote on the Dexus proposal, and by having a conflict of interest with its duty to act consistently with the responsible entity of the Investa Office Fund.

Dexus seeks orders, including to the effect that:

• complying substantial holder notices be filed
• parties to the Platform Sale Agreement disclose their interests in the outcome of the Dexus proposal and not vote at the meeting of unit holders and
• the proxy form and information circulated by companies in the Investa Commercial Property Fund Group be withdrawn and those companies cease advocating opposition to the Dexus proposal.

Alan Shaw
Counsel, Takeovers Panel
Level 10, 63 Exhibition Street
Melbourne VIC 3000
Ph: +61 3 9655 3500
alan.shaw@takeovers.gov.au

1 as responsible entity of Dexus Property Group, comprising Dexus Diversified Trust, Dexus Industrial Trust, Dexus Office Trust and Dexus Operations Trust

2 Comprising Armstong Jones Office Fund and Prime Credit Property Trust, with Investa Listed Funds Management Limited as responsible entity

3 Comprising Morgan Stanley Real Estate Investing, Investa Property Group Holdings Pty Ltd, Post Sale Portfolio Issuer Pty Ltd and Sundown Holdings BV, among others

4 References are to the Corporations Act 2001 (Cth) unless otherwise indicated

5 Provides management services to IOF and is part of the Investa Commercial Property Fund Group