Four years on from weighing a bid to buy Dexus, there has been talk that global private equity powerhouse Blackstone has been back on the scene, weighing up the prospect of an $8bn deal in recent months.
Blackstone sources dismissed the talk, saying it has not been looking, but multiple sources say it has been doing work on a possible transaction in recent months, with an offer stacking up at about $8 a share, equating to about $8bn.
However, the understanding is that the New York-based private equity group, which is the largest in the world, has cooled on the opportunity for now.
The understanding is that the deal plans stalled about two months ago with the departure of Mark Harrison, who GPT had announced seven months ago would be joining the property trust from Blackstone as its new chief operating officer.
He is thought in recent months to have left Blackstone, where he was a real estate managing director under the leadership of Chris Tynan.
He had earlier worked for Charter Hall.
The understanding is that the motivation for an acquisition of Dexus by Blackstone was to secure control of its lucrative funds under management platform, which now includes infrastructure and property assets following its acquisition of AMP Capital.
It has a $14.8bn portfolio and manages $39.7bn for third parties.
Sources expect Blackstone would shore up support from the fund investors before embarking on a deal. It would also be buying Dexus at a time when its share price has fallen about 11 per cent this year as office properties have fallen out of favour, with the trend of working from home and with a weaker economy.
Dexus is the nation’s largest office landlord.
The group’s $7bn market value has almost halved since the pandemic.
When Blackstone was looking at the company last time around, it was working with JPMorgan.
Blackstone bid for listed office manager Investa Office Fund about seven years ago, but its $3.26bn proposal was beaten by Canadian pension fund OMERS, which gained controlled of the company for $3.4bn through its subsidiary Oxford Properties.
Market experts believe it would make sense for it to set its sights on a similar target.
Some believe the Dexus board would not accept an offer unless it was at net tangible assets, which at June was $8.97.
The company owns some of the most well known Australian office towers, including the MLC Centre in Sydney and 360 Collins Street in Melbourne, as well as airports and other key infrastructure assets.
In its portfolio are offices worth $20bn, $11bn worth of industrial properties, $9bn of retail, $2bn of healthcare, $11bn of infrastructure and $1bn of alternative investments.
Of its funds under management, 27 per cent is in infrastructure, 26 per cent is in offices, 22 per cent in retail and 18 per cent in industrial, with the remainder in other classifications.
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