As most of the sector is now aware, Stockland Group launched a failed $266 million takeover bid for Aevum Ltd, late last week.
Stockland will continue its takeover bid for Aevum despite the earlier rejection.
Stockland Corporation Ltd announced on Monday that it would pursue its takeover negotiations with Aevum Ltd despite the latter’s rejection of the cash bid for the blanket acquisition of the retirement group’s shares at 38 percent premium of the stock’s closing price on Friday.
Following careful consideration, group chairman Graham Lenzer said that the company’s board is rejecting Stockland’s unsolicited and opportunistic proposal to buy Aevum shares it has yet to acquire for $1.50 per share, arguing that the offer substantially devalues the target stock.
However, Stockland managing director Matthew Quinn said that the takeover pursuit would stay and his group is still looking forward for further talks in spite of the takeover bid apparently thwarted by Aevum’ board.
Mr Quinn has made it clear that the group wants to become the dominant player in retirement living in Australia.
He said that Stockland does not intend to revise the proposal in order to better lure Aevum’s board into considering the bid as he stressed that the company would keep all its options open in pursuing the deal but discounted the possibility of a hostile takeover, saying that “it’s not the nature of our group to do so.”
At present, the property group maintains a 15.9 percent stake on Aevum with a number of shareholders already convinced in selling their stocks on the proposed price as Mr Quinn added that they would notify the ASX on the revised Stockland’s holding within the next few days.
Stockland said that once the proposal is realised, the group’s retirement villages would jump from its current count of 24 going to around 53 and resulting to about twice its present revenue as it added that funds for the bid would be sourced from cash reserves and undrawn debt facilities.
If the deal is successful, it would increase the proportion of operating profit generated generated by Stockland’s retirement business by 3 per cent to approximately 8 per cent of group earnings before interest and tax.
Aevum has advised shareholders to take no action in relation to the offers.
ENDS
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I’m one of those intending to move into an independent-living retirement village for the first time. In my research via their respective website and correspondence with their sales people, I find that both Aevum and Stockland have excellent accommdations and facilities, but their accommodation prices on villas/units vary depending on how old the building were; their new developments are way out too expensive. I come from South Australia where median prices of houses are not as high as Melbourne,Sydney, or Brisbane and I’d come up with a retirement village saleswoman from Stockland expecting me to spend the rest of my retirement in their $550,000 3-bedroom modern unit! Well, you’d hardly find houses in the south of Adelaide selling for that much on average. It must be noted that newcomers in a retirement village make their decisions not only on the ingoing price for a certain villa or unit, but outgoings as well, that is the amount you pay regularly for the maintenance of the club house and sports facilities. I’m not a sports person and I’m no swimmer, so why should I pay for the maintenance of such. Many are just like me. Aevum and Stockland made no consideration on individual retirees when it comes to outgoings so that the committees of their residents tend to be bias towards those who hardly use the facilities at all! I suppose there should be some variation in outgoings for users of sports facilities and caravan parks and marina.