21 March 2016

Independent Board Committee of Investa Office Fund releases response to IOM Document Dexus (“Dexus”) refers to Investa Office Fund’s (“IOF”) announcement dated 18 March 2016 (“IOF Announcement”), which IOF is dispatching to IOF Unitholders.

This announcement concerns the review completed by the Independent Board Committee of IOF(“Independent Board Committee”) of a document published by Investa Office Management (the “Platform”) dated 15 March 2016 (“IOM Document”) in relation to the Dexus proposal to acquire 100% of the units in IOF (“Dexus Proposal”).

Dexus notes the following in respect of the IOF Announcement (which is attached for ease of reference):the Independent Board Committee has expressed concerns in relation to the IOM Document, including the failure to disclose the conflicts of interest that exist between the Platform and Investa Commercial Property Fund (“ICPF”) and the lack of alignment with IOF Unitholders in the outcome of the Dexus Proposal.

  • the Independent Board Committee continues to recommend that IOF Unitholders vote in favour of the Dexus Proposal, in the absence of a superior proposal
  • the Independent Expert confirmed on 18 March 2016, in a letter attached to the IOF Announcement, that it remains of the opinion that the Dexus Proposal is fair and reasonable to, and in the best interests of, IOF Unitholders in the absence of a superior proposal
  • if an IOF Unitholder wishes to vote on the Dexus Proposal, they should use the proxy form which was approved by the Independent Board Committee and which was attached to the IOF Notice of Meeting dispatched on 14 March 2016 (“IOF EM”)
  • IOF Unitholders should read the IOF Announcement carefully if considering the IOM Document

Dexus also draws to the attention of IOF Unitholders that the IOM Document fails to acknowledge key financial and strategic benefits of the Dexus Proposal. Dexus reiterates the benefits of the Dexus Proposal, which were set out in the IOF EM, for both new and existing Dexus Security holders including:

  • A strong value proposition providing substantial accretion while maintaining balance sheet strength and an expected greater relevance to equity and debt investors. The Dexus Proposal is expected to deliver annualised accretion to Underlying FFO of 7.9% per IOF unit and annualised FY16 FFO accretion of 17.5% per IOF Unit1. [see pages 4, 24, 35 and 38 of the IOF EM]
  • Based on Dexus’s closing price of $7.94 on 18 March 2016, the standard consideration implied value is $4.192, reflecting a 5.3% premium to IOF’s last stated NTA.
  • Investment in a higher quality, more diversified office portfolio with scope for substantial synergies and with a combined Management Expense Ratio (“MER”) reducing to sub 35 basis points. [see pages 31-35 of the IOF EM]
  • Enhanced growth opportunities. In addition to the Merged Group’s investment portfolio, IOF Unitholders will benefit from ongoing exposure to Dexus’s $1.1 billion development pipeline, leading Third Party Funds Management platform, with $10.6 billion of property managed on behalf of Third Party clients, and Trading business. [see pages 34-35 and 58 of the IOF EM]
  • A certain outcome for IOF Unitholders and an internalised management structure, with an experienced and stable team of more than 360 property professionals with a proven track record and established, efficient systems and aligned processes. [see pages 25 and 59 of the IOF EM]

1 Underlying FFO excludes Trading profits (net of tax). Headline FFO includes Trading Profits (net of tax). 2 The standard consideration implied value per IOF unit varies depending upon the trading price of Dexus securities. As the trading price of Dexus securities has increased between 3 March 2016 (being the last practicable trading date before the date of the IOF EM) and 18 March 2016, the standard consideration implied value has also increased.

IOF Unitholders are encouraged to read the Explanatory Memorandum carefully, which sets out the benefits, risks and disadvantages of the Dexus Proposal.

IOF Unitholders are encouraged to exercise their vote by attending the meetings relating to the Dexus Proposal which will be held on 8 April 2016 in person or voting by proxy using the proxy form which formed part of the IOF EM. If you wish to vote by proxy, you must lodge the proxy form with IOF’s registry by no later than 10.00am on 6 April 2016.

For further information please refer to the pdf.