Property Market Shift Opens Opportunities
Australia’s property sector continues to attract strong investor interest, with major players eyeing strategic acquisitions. AVJennings Limited (ASX:AVJ) has now entered into a Scheme Implementation Deed (SID) with AVID Property Group, in partnership with Proprium Capital Partners, in a deal valued at $0.655 per share. This agreement provides a significant premium to AVJennings’ pre-announcement trading price, delivering a strong value proposition for shareholders.
AVJennings Board Backs Certainty of Value
AVJennings’ Board of Directors believe the deal represents certainty of value for the Company’s shareholders. The agreement will, assuming shareholder approval is forthcoming, see AVID acquire all ordinary shares in AVJennings, securing an almost 100 per cent premium to AVJennings’ last closing price before the initial approach.
Under the terms of the Scheme, shareholders will receive $0.655 per share in cash, marking:
- A 98.5 per cent premium to AVJennings’ 27 November 2024 closing price of $0.33 per share.
- A 97.5 per cent premium to the 1-month VWAP of $0.3317.
- A 103.4 per cent premium to the 3-month VWAP of $0.3221.
Special Dividend Could Add More Value
Eligible AVJennings shareholders may also receive additional value in the form of a fully franked special dividend of up to $0.072 per share, subject to tax rulings, available funds, and lender consents. If paid, the cash amount of the dividend would be deducted from the Scheme consideration.
Ho Bee Land Exits the Race
AVJennings had previously received a non-binding, indicative proposal from Ho Bee Land Limited at $0.70 per share. However, no firm offer was made, leading AVJennings to formally terminate discussions.
AVID initially proposed $0.67 per share in November 2024 but revised its offer to $0.655 after extensive due diligence. AVJennings announced that following careful consideration, the Board determined that the AVID proposal, despite its reduction, was the best available option for shareholders.
Board Unanimously Supports the Deal
AVJennings’ Board of Directors has unanimously recommended that shareholders vote in favour of the Scheme, provided no superior proposal emerges and an independent expert confirms it is in their best interests.
AVJennings asserts that the directors believe this deal offers strong value, aligning with precedent real estate transactions while providing certainty in a volatile market.
Each AVJennings director intends to vote in favour of the Scheme for shares they own or control, subject to the same conditions.
Majority Shareholder Signals Support
SC Global Developments Pte Ltd, which holds approximately 54.02 per cent of AVJennings’ issued share capital, has confirmed its intention to vote in favour of the Scheme under the disclosed terms, barring a superior proposal.
Regulatory Approvals and Next Steps
The transaction remains subject to several key conditions, including:
- Approval by AVJennings shareholders and the Court.
- Independent expert confirmation that the Scheme is in shareholders’ best interests.
- Approval from the Australian Foreign Investment Review Board (FIRB) and the New Zealand Overseas Investment Office (OIO).
- No material adverse changes or prescribed occurrences.
AVJennings has appointed Kroll Australia as the independent expert to assess the Scheme, with a report to be included in the upcoming Scheme Booklet.
The Scheme Booklet, which will outline all key details and next steps, is expected to be distributed to shareholders in May 2025. AVJennings is being advised by Barrenjoey on financial matters and Allens on legal aspects.
For now, AVJennings shareholders are not required to take any action. The upcoming independent expert’s report and subsequent Scheme Meeting will be the next pivotal moments in determining AVJennings’ future under AVID’s ownership.
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