The directors of AVJennings (ASX: AVJ) have thrown their support behind the proposed $369 million takeover by US real estate investment manager Proprium Capital Partners in partnership with Australian residential developer AVID Property Group.
The bid’s cash consideration of $0.655 per share represents a 98.5% premium to the $0.33 closing price of AVJennings shares on 27 November 2024 and a 103.4% premium to the three-month volume-weighted average price of $0.322 to the same date.
AVJennings will issue a fully franked special dividend whereby eligible shareholders will receive an additional value of up to approximately $0.072 per share in franking credits, with the offer price expected to be reduced by the cash amount of any special dividend.
AVID’s proposed buyout follows the close of discussions between AVJennings and Singapore developer Ho Bee Land, which had offered a conditional bid of $0.70 per share in January.
AVJennings confirmed it had terminated all discussions with Ho Bee — which holds a 5.5% stake in AVJennings — the following month, after it failed to submit a binding proposal for the $390 million deal.
Ho Bee, which manages $8.35 billion in assets, regarded the potential acquisition as a significant step in strengthening its position in the Australian market.
After a four-month due diligence period, AVID downgraded the $0.67 offer price of its original unsolicited bid in November by $0.015 per share.
Nevertheless, the AVJennings board has unanimously recommended that shareholders vote in favour of the takeover, believing the revised consideration offers shareholders certainty of value at a substantial premium to undisturbed trading levels, historical trading benchmarks and precedent Australian real estate transactions.
Singapore property developer SC Global Developments, the majority shareholder with a little over 54%, said it intended to vote all of its shares in favour of the scheme.
AVID is one of Australia’s largest privately held residential developers with projects including residential master-planned communities, resort communities, completed homes and apartments.
The group’s current portfolio includes more than 6,300 residential blocks with 75,000 residents and a gross revenue pipeline of $5 billion.
AVID is owned by several international institutional investors and is managed and advised by Proprium.
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