This article is from the Australian Property Journal archive
HOME Consortium (HomeCo)’s Daily Needs REIT (HDN) is set to take over ASX-listed big box retail rival Aventus Retail Property Fund (AVN) after both agreed to a $2.8 billion acquisition deal.
The takeover will create a $4.1 billion portfolio of large format shopping centres and convenience retail sites, which have outperformed their retail counterparts throughout the pandemic and attracted growing investor attention as they showed off their resilience during the pandemic.
HomeCo will acquire all AVN securities via schemes of arrangement subject to investor approval on both sides. AVN securityholders will receive consideration with an implied value of $3.82 per security, comprising 2.2 HDN units for every AVN unit, and $0.285 cash or 0.038 HomeCo securities for every one share in Aventus Holdings Limited.
The implied offer price of $3.82 per security represents a 15.3% premium to Aventus’ last close, and a 31.9% premium to its net tangible assets of $2.69 per security at the end of June.
Both boards have recommended the deal.
For HomeCo, the deal is the latest chapter in its growth from the owner of empty warehouses once occupied by failed hardware chain Masters into a property platform with $5 billion of external assets under management, 12 months ahead of its stated 2022 target. It spun off HDN late last year and more recently the HealthCo Healthcare and Wellness REIT.
“The industrial logic of this transaction is very compelling for HDN unitholders and AVN securityholders. The combination of HDN and AVN creates a leading ASX-listed Daily Needs REIT with a highly strategic $4.1 billion portfolio of last-mile logistics infrastructure in Australia’s leading metropolitan growth corridors,” HomeCo CEO and managing director, David Di Pilla said.
“This transaction is consistent with our strategy to build high-quality portfolios exposed to powerful megatrends and enhanced by best-in-class management teams.”
HDN last month spent $222 million on six retail assets, heavily weighted towards major national tenants including Coles, JB Hi-Fi, Spotlight and Super Retail Group. It exceeded its forecast maiden full-year results.
HomeCo has upgraded its forecast FY22 pre-tax funds from operation guidance to 26.0 cents, an upgrade of 41% on prior guidance, and 89% growth year-on-year. It reaffirmed its FY22 dividend guidance of 12.0c per security.
Its share price closed 2.4% higher at $7.68.
