Ho Bee Land Drops AVJennings Bid; Australian Property Developer to be Acquired by US Fund

Singapore-based Ho Bee Land Abandons Plan to Acquire Australian Property Developer AVJennings

Real Estate Group Decides Not to Proceed with Offer

Singapore-based real estate group Ho Bee Land has announced that it has decided not to proceed with its offer to acquire Australian property developer AVJennings. This decision comes after AVJennings accepted a competing binding offer.

Background on the Acquisition Offer

In January, Ho Bee Land, which indirectly holds a 5.49% 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 values its presence in Australia and remains open to opportunities that align with its long-term business objectives.

AVJennings Accepts Competing Binding Offer

AVJennings, listed on both the Singapore Exchange and the Australian Stock Exchange, is controlled by real estate tycoon Simon Cheong. The company has confirmed that no binding proposal has been received from Ho Bee Land, and that all discussions have been terminated.

New Scheme Implementation Deed

AVJennings has entered into a scheme implementation deed with PM Nominees C, 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.

Scheme Consideration

The scheme consideration of A$0.655 a share represents a premium of 98.5% above AVJennings’ closing price of A$0.33 on November 27, prior to the announcement of the proposal from PM Nominees C. The offer price also represents a 97.5% and 103.4% 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.

Board Recommendation

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.

Additional Benefits

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.

Independent Expert Report

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.

Conclusion

The decision by Ho Bee Land to abandon its plan to acquire AVJennings comes as a surprise, given the real estate group’s previous interest in the Australian property developer. However, with the acceptance of a competing binding offer, it is clear that AVJennings is pursuing a more attractive option.

FAQs

Q: Why did Ho Bee Land decide not to proceed with its offer for AVJennings?
A: Ho Bee Land decided not to proceed with its offer after AVJennings accepted a competing binding offer.

Q: What is the new scheme implementation deed between AVJennings and PM Nominees C?
A: The scheme implementation deed is an agreement between AVJennings and PM Nominees C to acquire all of AVJennings’ shares for A$0.655 a share.

Q: What is the scheme consideration and how does it compare to AVJennings’ previous trading levels?
A: The scheme consideration of A$0.655 a share represents a premium of 98.5% above AVJennings’ closing price of A$0.33 on November 27, prior to the announcement of the proposal from PM Nominees C.