Frustration of Cromwell Bid

Since 29 November 2016 Cromwell has consistently sought access to additional information from the ILFML Board so that it can reassess its offer price.


On 29 November 2016 the Chairman of Investa Commercial Property Fund’s (ICPF) subsidiary Investa Listed Funds Management Limited’s (ILFML) advised Cromwell of the rejection of its $4.45 per security offer of 14 November 2016 to security holders in Armstrong Jones Office Fund and the Prime Credit Property Trust (ASX: IOF).  

Since 29 November 2016 Cromwell has consistently sought access to additional information from the ILFML Board so that it can reassess its offer price. Those efforts have been continually frustrated by the Board of ILFML which has unreasonably and unusually refused access to the minimal level of information needed for Cromwell to consider and submit a revised offer.

Despite representations to the contrary (ASX announcement by ILFML dated 3 February 2017) made by ILFML, the IOF responsible entity seems determined to frustrate Cromwell’s ability to submit a revised offer. Cromwell believes that there is no justifiable reason for it to do so, particularly in circumstances in which;

  1. The ILFML Board has tabled its own internalisation agenda; and
  2. There has been media speculation of a privatisation proposal by ICPF.

Cromwell believes that an independent responsible entity, free from any conflicting interests should be keen to ensure a competitive, informed and efficient market and secure a compelling proposal in the best interests of all securityholders of IOF. ILFML’s actions effectively work to close off this option.

Cromwell does not accept that ILFML’s conduct represents appropriate conduct for a responsible entity of a managed investment scheme such as IOF, especially given the potential for a conflict of interest between members of IOF and ICPF’s interests.

Cromwell is prepared to agree arrangements that protect IOF’s information on reasonable and commercial terms, given the limited nature of the information requested. As evidence of its commitment Cromwell has on two occasions signed and tabled binding confidential agreements consistent with market practice.

IOF and its advisers have consistently delayed, and insisted on unreasonable and uncommercial fetters to the provision of any information. Importantly those restrictions preclude a level playing field in the event of a competing offer, in particular if a privatisation proposal from ICPF eventuates.

ICPF, via its acquisition of the Investa Office Management Platform in 2016, and as co-owner of a number of assets, has a privileged position. IOF and ICPF are parties to a deal which could result in ICPF receiving approximately $45 million for the sale of 50% of its stake in IOM to IOF.  

Following investor concerns about the governance of IOF, ILFML announced a governance review about the benefits of the IOM arrangements.  To date, and despite its representations to the market, ILFML has not provided any update on the status or the results of this review.

ICPF further entrenched its privileged position with the acquisition of an 8.94% stake in IOF at $4.23 per security immediately followed by an offer to acquire Cromwell’s stake in IOF. Surprisingly, this occurred on the same day ILFML first terminated discussions with Cromwell.  

Cromwell is simply not prepared to enter into arrangements that precludes it from reacting to any action which would increase ICPF’s ability to block proposals from Cromwell or any other party, a clear concern given ICPF’s purchase in November 2016.

We struggle to see how ILFML’s conduct is consistent with acting in the best interests of IOF securityholders as a whole and does not give preference to ICPF, or any sale of a 50% stake in IOM. That IOM and ICPF are owned by institutions which insist upon the highest level of corporate governance seems to be inconsistent with the actions of the Board of its wholly owned subsidiary (ILFML).

Given the importance to securityholders of a proposal from Cromwell, Cromwell was surprised to be told that the Chairman of ILFML has not been available to engage with Cromwell in the past week and has not otherwise delegated the negotiation of appropriate arrangements.

As the largest securityholder of IOF, Cromwell believes that ILFML should ensure a fully informed and efficient market with a level playing field. Its failure to do so is a breach of its fiduciary obligations. Cromwell remains committed to working co-operatively with IOF to resolve this matter to the mutual benefit of all IOF securityholders.


  • 7 March 2016 – ICPF acquires Investa Office Management Platform, including ILFML, as responsible entity of IOF from Morgan Stanley Real Estate Investing.
  • 14 November 2016 – Cromwell submits a bona fide indicative non-binding but fully funded all cash offer for IOF at $4.45 per IOF security subject to usual conditions including due diligence and foreign investment approval.  
  • 21 November 2016 – in support of our bona fides Cromwell supplemented our proposal with letters of support from third party debt and equity providers.     
  • 29 November 2016 – despite Cromwell’s attractive and compelling proposal, and Dexus having previously been granted due diligence for its offer, ILFML informs Cromwell that as RE they would no longer engage with Cromwell and its information requests.
  • 29 November 2016 – ICPF announces it has acquired 8.94% stake in IOF at $4.23 per security from a company owned by funds managed by Morgan Stanley Real Estate Investing and that it is progressing discussions on the terms on which IOF might acquire a 50% interest in IOM.
  • 13 December 2016 – ILFML announces that any decision on the potential acquisition of 50% of IOM will be taken as part of an operational and governance review on how IOF will work with IOM
  • 13 December 2016 – 2 February 2017 – Cromwell seeks to agree access to limited information on reasonable terms. During this time the Chairman of ILFML was frequently unavailable to discuss the proposal from Cromwell.
  • 3 February 2017 – IOF announces to the market that it has been unable to agree arrangements to enable Cromwell to access information.

Media Enquiries:     

Paul Weightman

CEO/Managing Director


About Cromwell Property Group

Cromwell Property Group (ASX:CMW) is a Global Real Estate Investment Manager. The Group is included in the S&P/ASX 200. As at 30 June 2016, Cromwell had a market capitalisation of $1.8 billion, a direct property investment portfolio in Australia valued at $2.3 billion and total assets under management of $10.3 billion across Australia, New Zealand and Europe.