)
Singapore property giant Ho Bee Land has weighed into the battle for control of AVJennings (ASX: AVJ) with a $390 million takeover play that has trumped an existing offer from AVID Property Group by $14 million.
The bid from Ho Bee Land pitches the property development group, with $8.3 billion in assets, against US-based Proprium Capital Partners which has about $4.8 billion in assets under management, including control of AVID Property Group on behalf of global institutional investors.
Both takeover bids represent international plays for a bigger slice of the Australian housing market that has been impacted by critical undersupply in recent years.
It also might be seen as unfinished business for Ho Bee Land, which was formerly the largest shareholder in Gold Coast-born developer Villa World before AVID Property Group’s $290 million takeover of the developer in 2019.
Ho Bee Land and Villa World had previously been joint-venture partners in several projects, including the Elyssia masterplanned development at Wollert near Melbourne.
AVJennings announced today that the competing bid from Ho Bee Land comprises an “unsolicited, conditional and non-binding indicative proposal” to acquire all of the shares in AVJennings that Ho Bee does not already own for 70c per share.
Ho Bee Land, through Queensgate Investments, currently holds a 5.39 per cent stake in AVJennings after picking up shares in the company last month.
The conditional offer is up from the AVID Property Group offer price of 67.4c per share which values AVJennings at $376 million. However, both offer prices are conditional on the receipt of dividends from AVJennings.
In Ho Bee’s case, the offer price will be cut by the value of any dividend up to 6c per share announced after 14 January 2025. AVID Property Group’s offer price will be reduced by the amount of any fully franked special dividend, although the bid assumes that no other dividend or distribution will be declared or paid by AVJennings.
Ho Bee Land, which has operations in Singapore, China and the UK, has been growing its development portfolio in Australia for more than a decade, with a strong interest in the Gold Coast and Victorian markets.
The company, which has offloaded several high-rise projects in recent years including the sale of a four-tower site at Mermaid Beach to Aniko Group for $30 million, has about 4,300 residential lots in its development pipeline.
AVJennings is sitting on about 10,000 residential lots across 45 projects in NSW, Victoria and Queensland, while AVID Property Group’s portfolio comprises 6,300 residential lots with a gross revenue pipeline of $5 billion.
“The Ho Bee Land proposal is subject to a number of conditions including satisfactory completion of due diligence by Ho Bee Land, receipt of all necessary internal approvals, entry into a mutually acceptable scheme implementation agreement, and unanimous recommendation by the AVJ Jennings board,” says AVJennings in an announcement to the ASX.
“Ho Bee Land has also requested a period of initial exclusivity within which to undertake due diligence and negotiate and enter into a scheme implementation agreement.”
When AVID Property Group announced its takeover bid for AVJennings in November, an exclusivity deed was granted for the Proprium Capital-backed group until 31 January.
“The Ho Bee Land proposal is a competing proposal to the AVID proposal and AVJennings will notify AVID of the Ho Bee Land proposal in accordance with the exclusivity deed,” says the company.
“The AVJennings board, with the assistance of its financial and legal advisers, will review the Ho Bee Land proposal against the AVID proposal.”
The company has urged shareholders to take no action on either proposal, adding that there is no certainty that either will lead to a binding deal.
“The AVJennings board will make a further announcement in relation to the Ho Bee Land proposal once it has completed its review of that proposal and will continue to keep the market informed of any material developments in relation to the proposals in accordance with its continuous disclosure obligations.”
AVJennings shares were trading at 68.5c, up 4.5c or 7 per cent, at 11.18 (AEDT).
)
