Ho Bee Land drops AVJennings bid; Australian property developer to be acquired by US fund
[SINGAPORE] Real estate group Ho Bee Land on Tuesday (Apr 1) said it has decided not to proceed with its offer for Australian property developer AVJennings. This comes after AVJennings accepted a competing binding offer.
In January, Ho Bee Land – which indirectly holds a 5.49 per cent stake in AVJennings – launched a non-binding indicative offer to acquire all the shares it does not indirectly own for A$0.70 apiece.
The real estate group said on Tuesday that it “values its presence in Australia and remains open to opportunities that align with its long-term business objectives”.
AVJennings – listed on both the Singapore Exchange and the Australian Stock Exchange – is controlled by real estate tycoon Simon Cheong. It has confirmed that no binding proposal has been received from Ho Bee Land, and that all discussions have been terminated.
In a separate announcement, the Australian property developer said it has entered into a scheme implementation deed with PM Nominees C, to acquire all its shares for A$0.655 a share by way of a scheme of arrangement.
PM Nominees C is an investment vehicle of two companies – American real estate fund Proprium Capital Partners; and Avid Property Group, an Australian residential and industrial developer controlled by Proprium.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
In November last year, the investment vehicle submitted an unsolicited, incomplete and non-binding indicative proposal to acquire AVJennings for A$0.67 a share.
Following completion of extensive due diligence over the last four months, the scheme consideration has been reduced by A$0.015 to A$0.655 a share, said AVJennings.
The offer price of A$0.655 represents a premium of 98.5 per cent above AVJennings’ closing price of A$0.33 on Nov 27, prior to the announcement of the proposal from PM Nominees C.
It also represents a 97.5 per cent and 103.4 per cent premium over the volume weighted average price of the shares traded for the one-month and three-month periods, respectively, prior to the initial announcement.
AVJennings’ directors believe the revised scheme consideration provides shareholders with certainty of value at a substantial premium to its undisturbed trading levels, historical trading benchmarks, as well as precedent Australian real estate transactions.
The board has decided to formally agree with the scheme, following careful consideration of the revised proposal, as well as considering the fact that a binding proposal from Ho Bee Land has not been forthcoming.
AVJennings has been given the nod to pay a fully franked special dividend, allowing eligible shareholders to receive an additional value of up to about A$0.072 per share in franking credits.
The scheme consideration would be reduced by the cash amount of any special dividend paid to AVJennings’ shareholders.
AVJennings has appointed Kroll Australia as the independent expert to prepare a report and opine on whether the scheme is in the best interests of shareholders.
A scheme booklet containing more detailed information is expected to be circulated to shareholders in May.
As at 10.16 am on Tuesday, shares of AVJennings on the Singapore Exchange were unchanged at A$0.58, while shares of Ho Bee Land were down 0.6 per cent or S$0.01 at S$1.81.
