This article is from the Australian Property Journal archive
RETIREMENT living operator Aveo has accepted Canadian giant Brookfield’s $1.27 billion takeover offer.
Aveo securityholders will entitled to $2.195 cash per security, inclusive of he 2019 full year distribution of 4.5 cps.
A conditional scrip consideration alternative is available that provides Aveo securityholders with the potential to participate in a “stub equity” vehicle which would give them future exposure to Aveo.
The cash consideration represents a 28% premium to Aveo’s closing price of $1.71 on the day before updating the market on 13 February that it had received a number of indicative non-binding bids from interested parties.
“The IBC has carefully considered a range of alternatives as part of the Strategic review process and widely tested the market with a thorough and comprehensive auction process,” IBC chairman, Walter McDonald said.
“Having completed that process, the IBC and full Aveo Board have unanimously concluded that in light of Aveo’s short-to- medium term outlook the Brookfield Transaction is in the best interests of our securityholders.”
Early in 2017, Aveo was the subject was a damning investigation by Fairfax and the ABC that exposed excessive fees and questionable regulations practices, and in August appointed Merrill Lynch as financial advisor for a strategic review of its retirement portfolio and operations.
The group has revealed that property market conditions would slash its annual underlying profit from around $127 million the last financial year to $50 million for FY19, and annual distributions would be nearly halved to 4.5 cents per stapled security.
The company said that despite some improvement since mid-May, the subdued market “continues to have an adverse impact on the timing of prospective residents who are seeking to settle on their existing properties and move into seniors living accommodation”.
