Cromwell tells ILFML to give up

CROMWELL has taken another public swing at Investa after CGI Glass Lewis became the second major international proxy advisor to go against Investa Listed Funds Management Limited (ILFML)’s proposal to partially internalise the Investa Office Fund.

Cromwell is yet to find a way to take over IOF – of which its 9.83% stake makes it the largest single unitholder – following the rebuke of its $2.7 billion acquisition proposal last week, which has since been bumped up to $3 billion.

Earlier this week Cromwell described IOF’s $45 million proposal to acquire a half-stake in the Investa Office Management platform, which oversees around $10 billion in office and commercial assets and is owned by the unlisted Investa Commercial Property Fund, as “a worst of all words” outcome for IOF investors.

Cromwell said it will be voting against the related party proposal because “it results in IOF acquiring future uncertainty, embeds questionable governance practices, and reduces investor value both now and in the context of any potential future third party acquisition opportunity,”

Investa told shareholders in recent weeks that it unanimously recommended shareholders approve of the move at a vote on May 31st.

On Friday, it upped its aggressive opposition after CGI Glass Lewis joined ISS as international proxies against the IOF’s move.

“We welcome the CGI Glass Lewis and ISS recommendations that unitholders vote against the proposal,” Cromwell chief executive officer Paul Weightman said, and he reiterated the Cromwell’s sentiment broadcast earlier in the week.

“This is a proposal that lowers the bar in regard to corporate governance. It destroys value for mum-and-dad unitholders to whom ILFML owes a fiduciary duty and is a ‘worst of all worlds’ scenario.

“I find it extraordinary that major institutional funds, who publicly commit to maintain the highest standards of corporate governance and ethical behavior, are promoting a transaction that two major international proxy advisors have recommended against and which an independent expert was not asked whether it was in the best interests of unitholders.” Weightman concluded.

Australian Property Journal

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