This article is from the Australian Property Journal archive
EUREKA Group has held out Aspen’s takeover bid, which has now expired, but Aspen said yesterday it would be seeking representation on Eureka’s board, and further change at the top, including “recruitment of a high quality CEO”.
The Eureka board and key shareholder Ben Cottle’s Filetron flatly rejected Aspen’s multiple takeover attempts, believing it undervalued the affordable accommodation provider, and that the bidder’s statement contained “misleading statements and material omissions”.
Aspen’s takeover offer for Eureka has now closed. It now owns a stake of 36% in the company valued at about $58 million, equating to 8% of Aspen’s total assets. The transaction was funded with equity, increasing Aspen’s equity base by about 10%.
“As foreshadowed in Aspen’s bidder’s statement Aspen will seek to obtain representation on Eureka’s board to help improve performance and returns for shareholders,” Aspen said in an ASX statement yesterday.
“Aspen’s views on the initial steps to achieve this is through board renewal and recruitment of a high quality CEO.”
Murray Boyte has been in the role of acting CEO since the middle last year, when previous chief executive Cameron Taylor took personal leave and then stepped down following a non-work related accident.
Taylor was this month appointed CEO of Queensland aged care and retirement living provider Sundale.
Meanwhile, Aspen yesterday upgraded its full-year estimated underlying earnings to at least 13.5c per security, the top end of previous guidance.
“Residential markets remain acutely undersupplied, particularly at lower rent and price points, and this is unlikely to be resolved in the foreseeable future,” it said.
“Aspen’s residential and lifestyle portfolios are essentially full and three-month forward bookings for our parks portfolio are 18% ahead of the same time last year.”
It said rents are growing “strongly yet remain affordable and competitive” at an average of about $365 per week for residential dwellings and $190 per week for lifestyle land sites.
“We continue to recycle capital from properties with relatively high rent and price, at about 3% net yield and a premium to book value, into properties with lower rents more suited to our target customer base. This is keeping a lid on average rent, increasing net asset value, increasing growth prospects, and reducing risk.”
