Brookfield shake-up moves tower ownership from BPO to BPP OWNERSHIP of $4 billion of Australian towers is set to change as Canadian giant Brookfield Asset Management moves to form one of the worlds largest property groups. The Canadian group's property spin off, Brookfield Property Partners last night made a takeover bid for another of the group's funds, the Brookfield Office Properties (BPO), in a $US5 billion move aimed at creating a dominant commercial real estate player. In Australia, the deal will effectively bring Brookfield's top quality towers, which are held by BPO, under the full control of Brookfield Property Partners. BPO owns some of the best towers in Australia with a portfolio spanning 19 local properties, including Sydney's One Shelley Street and KPMG Tower, as well as stakes in NAB House, IAG House, the E&Y complex and Darling Park. In Melbourne, its holdings include Southern Cross East Tower and West Tower and a stake in Bourke Place. The portfolio in Western Australia is dominated by Brookfield Place, Perth, which is anchored by BHP Billiton, and the group is developing a second tower as part of the precinct. In July, BPO admitted that plans to float its $4 billion-plus Australian office portfolio were on the backburner and it might instead pursue a deal in private markets. In February, the group had sparked hopes that it would look to float its prime local office holdings on the back of a recovery in the real estate investment trust sector. BPO chief executive Dennis Friedrich told international analysts in July that plans to harvest some assets by setting up an Australian-listed trust were "a little stalled" and Brookfield was more likely to undertake a "private transaction" rather than a listing. The deal proposed overnight between the Brookfield Property Partners and BPO - both which are listed on the New York Stock Exchange and the Toronto Stock Exchange - will see BPO shareholders receive a 15 per cent premium for their stock in a cash and script bid. Brookfield Property Partners will launch of a tender offer later this month for the 49 per cent of BPO shares it does not own at $US19.34 per share. BPO shareholders will be given a choice between script and cash, with a ceiling of $US1.7 billion on the cash component. "The offer provides an attractive opportunity for BPO shareholders to exchange their common shares for an interest in our flagship global property company and cash," Brookfield Property Group chief executive Ric Clark said. "The combination of these leading commercial real estate platforms will create a diversified portfolio of best-in-class real estate for investors seeking attractive risk-adjusted returns, through income and capital appreciation," he said. The deal is driven by Brookfield's desire to consolidate its global office properties under one platform and substantially increase Brookfield Property Partners' public float, helping it to accelerate its growth strategy, Mr Clark said. The new entity would have $US45 billion of assets comprising more than 330 million square foot (30.66 million square metres) of office, retail, industrial and multi-family assets in key markets on four continents. Brookfield Property Partners plans to finance the cash part of the offer through an acquisition facility with a syndicate of banks. In order to refinance that facility, it would consider making asset sales, undertaking debt financings and issuing corporate debt, or new preferred stock or equity. BPO investors are seen as likely to support the deal as their dividends are forecast to jump by 79 per cent. A number of BPO shareholders have already expressed interest in swapping their holdings for Brookfield Property Partners script with about 11 per cent of the register backing the offer. As well as Australian holdings, BPO owns a premier office portfolio across the United States, Canada, and the United Kingdom. It total portfolio comprises properties spanning more than 80 million sq. ft. The combined company would also have one of the top retail shopping centre platforms in the United States, an industrial and logistics property business in the US and Europe and about 20,000 apartments. The group would also have access to the full range of Brookfield's real estate management, which has setting up $US17 billion of real estate investments over the last 25 years. It would also have Brookfield's private real estate funds platform, which has over $US3.5 billion of capital ready to invest. The combination of BPO and Brookfield Property Partners will increase the latter's public float to about $US4 billion, lifting its trading liquidity. The combination could help BPO unlock development projects in global office holdings. Brookfield Property Partners presented the proposal to BPO's independent board last night. BPO is expected to review the deal and appoint a committee of independent directors.