AMP office fund rivals Dexus and Mirvac swap debt claims as crucial vote nears

As the battle for the $7.5bn AMP office fund comes down to the wire, Dexus has won key consents from lenders and financiers to take control of the flagship vehicle.

AMP Capital Wholesale Office Fund has stakes in key assets including Sydney’s Quay Quarter Tower.

As the battle for the $7.5bn AMP office fund comes down to the wire Dexus has won key consents from lenders and financiers to take control of the flagship vehicle.

The group has told major investors in the AMP Capital Wholesale Office Fund that it offers the most stable option in the face of tough debt markets.

But rival Mirvac has responded by telling fund investors it also has approval from senior lenders and will work to get approvals from US private placement note holders if it wins a vote on the fund’s future due on Monday.

The vote will see investors either stay with AMP and transfer the management to Dexus, or make a switch to rival property group Mirvac.

The contenders are each seeking to win over the big superannuation funds in the vehicle, which has stakes in key assets including Sydney’s Quay Quarter Tower.

Getting the financing approval could be seen as advantageous in the more uncertain lending environment, particularly as interest rates have leapt in recent months, with further rate hikes are expected.

Dexus has also obtained consent from US private placement noteholders, which could also pose a challenge for the rival bidder, although some sources played this down.

AMP, which is selling the local Collimate Capital arm that manages $28bn of real estate and infrastructure to Dexus, has sought to emphasise the benefits of investors sticking with the fund and going to Dexus.

The financial services company has a substantial earn out on the line and Dexus has also been keen to emphasise that it would offer a seamless transition. AMP has raised some hackles by warning it would only do the minimum required when transferring the fund to Mirvac if it lost the vote, which has a majority threshold.

Mirvac has responded by sending a message to investors saying it had all consents from senior lenders and all necessary approvals.

Industry sources said the US noteholder process only started after the vote and there are about nine US note holders from which it must win consent.

The vote, which was set to be held on Friday, was postponed just ahead of proxies for the meeting falling due on Wednesday morning.

The vote was adjourned by the independent chair of the meeting, former ASIC chairman Alan Cameron, so that investors could have the time to consider the last-minute changes proposed by AMP.

The contenders are facing a tight vote on the fund’s management with both contenders well-regarded as major office landlords and developers.

The Dexus purchase of the local Collimate empire has come under attack from rival fund managers seeking to gain control of key vehicles, with Plenary Group also targeting an infrastructure fund and Vicinity Centres and GPT looking at a shopping centre fund.

Dexus has outlaid $250m for the platform but further payments partly depend on it keeping the management of the funds longer term. The company has emphasised its experience in running pooled funds and its ability to keep the business together after a tumultuous period as part of AMP.