CPA investors wait for details of two options CMIL chairman Richard Haddock. Investors in takeover target Commonwealth Property Office Fund (CPA) must now wait for details from independent directors of its manager on the proposed internalisation by Commonwealth Bank before any new offer can be made. Dexus Property, which owns an option over 14.9 per cent of CPA, has made an indicative joint offer for CPA with the Canadian Pension Plan Investment Board equal to $1.15 a security, which investors say is too low. This was rejected by funds manager, Commonwealth Managed Investments Ltd's (CMIL) independent directors, who said the "board has determined that the Dexus proposal does not provide a compelling value proposition for CPA unitholders." "Should the consortium decide to submit a revised proposal with improved terms, it will be considered on its merits," CMIL chairman Richard Haddock said. But analysts have said that until details emerge of the privatisation and how that affects CPA's net tangible assets, Dexus has no comparison value to bid against. CPA is trading at $1.19 and fund managers have said at the end of the deal a sweetener of up to $1.22 a security would be needed to sway sellers. Under an internalisation, CPA investors would likely receive the NTA, which is $1.15. Bank of America Merrill Lynch's head of property analysts Simon Garing said the joint venture between Dexus and the Canadian group effectively provided for four weeks to continue discussions with CIML/CBA to come to an agreement. "Dexus also has the option of waiting for the internalisation to complete before making another move," Mr Garing said. CPA's net tangible asset would be reduced under either a takeover or internalisation due to CIML's advisory fees, debt break costs, the facilitation fee and the conversion payment for the convertible note, which we believe is about $22 million larger for a takeover than internalisation. We estimate these costs would lower CPA's effective NTA by 4.6 per cent to $1.10 under a takeover or 3.9 per cent to $1.11 under an internalisation.