Australian Unity Office Fund has announced plans to explore a potential merger with the Australian Unity Diversity Property Fund, creating an entity with $1.2 billion of real estate. It follows a strategic review by the Australian Unity Office Fund triggered by a lagging share price, and conversations this year from Australian-listed groups about possible takeover proposals. However, sources say their own lagging share prices have made any merger proposal uneconomical and any cash proposal unattractive, which has prevented talks from progressing. Working for Australian Unity Office on the review since the start of the year has been adviser Highbury Partnership and law firm MinterEllison. The office fund, which has a market valuation of about $400m, has been a takeover target in the past.