Starwood reaffirms AOF takeover bid despite Keppel venture

US giant Starwood recommits to takeover bid for Australian Unity Office Fund despite its tie-up with Singapore’s Keppel.

United States private equity giant Starwood Capital has recommitted to its $485m takeover bid for the Australian Unity Office Fund in the wake of Singapore’s Keppel Capital taking a half stake in the listed trust’s manager.

Starwood said that “to the extent the (responsible entity) sale will result in the failure of a defeating condition to Starwood’s announced takeover bid for all the units in AOF … Starwood confirms … that it will not rely on the RE sale to lapse the AOF bid”.

The US suitor said it remained committed to pursuing its AOF bid, which represented an attractive opportunity for all unit holders to achieve liquidity at a certain cash value above recent trading levels and AOF’s pro forma net tangible asset.

“Starwood looks forward to engaging with all stakeholders in relation to the AOF bid,” the US company said. It is advised by investment bank Rothschild.

Australian Unity surprised investors last Friday by forming a strategic 50:50 joint venture partnership with Keppel Capital.

The pair said they would work together to identify, fund, and manage investment opportunities in the Australian metropolitan office property sector.

As well as running the listed trust the venture will scout out a “range of assets and funds” in the suburban office property sector.

Australian Unity’s wealth and capital business, executive general manager, property markets, Mark Pratt said Keppel Capital was a logical and compelling joint venture partner for Australian Unity.

“Keppel has demonstrable experience sourcing assets and capital that will supplement Australian Unity’s activities in the Australian metropolitan office sector,” he said.

Keppel Capital chief executive Christina Tan said the company was seeking to deepen its Australian footprint.

“Australian real estate continues to be an attractive asset class, generating attractive income returns in a low yield environment,” she said.

Australian Unity said setting up the joint venture with Keppel Capital was unrelated to the announcement and was the result of a number of months of confidential detailed discussion and negotiation between Australian Unity and Keppel Capital.