The board of leading Australian home builder AVJennings (ASX: AVJ) is set to recommend shareholders vote in favour of a proposed takeover offer from Proprium Capital Partners and AVID Property Group.
The company’s directors have informed shareholders that they believe the indicative proposal provides an opportunity to realise their investment in AVJennings at a price significantly above its historical trading levels.
Proprium and AVID’s non-binding proposal to acquire all outstanding shares in AVJennings features a cash consideration of $0.67 per share by way of a scheme of arrangement.
The all-cash indicative proposal price represents a 103% premium to the $0.33 closing price of AVJ shares on 27 November 2024 and a 108% premium to the $0.3221 3-month volume-weighted average price.
AVID also proposes to permit AVJ to pay a fully franked special dividend on or before the scheme implementation date.
This would allow eligible AVJennings shareholders to receive additional value of up to approximately $0.06 per share in franking credits.
In preparation for receiving a binding proposal, AVJennings’ directors have granted AVID exclusive access to a confirmatory due diligence period through to the end of January 2025.
Subject to the satisfactory completion of due diligence and the assessment of an independent expert and in the absence of a superior offer, the directors have confirmed they will vote any shares they hold or control in favour of the proposal.
The AVID bid for AVJennings dates back to 2 August 2024, when the builder received a preliminary offer to acquire 100% of AVJ shares via an agreed scheme of arrangement.
Since the initial approach, both parties have held extensive discussions and negotiations, resulting in the improved indicative proposal of $0.67 per AVJ share.
US-based Proprium Capital Partners is a specialist real estate investment manager with approximately $4 billion in assets under management including AVID, which is one of the group’s flagship investments.
AVID is one of the largest privately held residential developers in Australia, with a portfolio of projects including residential master-planned communities, resort communities, completed homes and apartments.
AVID’s current portfolio includes more than 6,300 residential blocks with 75,000 residents and a gross revenue pipeline of $5 billion.
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