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Australian property developer Ingenia Communities Group has offered to acquire all shares of residential developer Peet in a deal valuing the company at AUD 992.5 million (USD 710.93 million). Under the proposal, Peet shareholders would receive AUD 0.68 in cash and 0.3367 Ingenia stapled securities for each share, implying a value of AUD 2.12 per share. The offer represents a 17.1% premium to Peet’s last closing price before its shares entered a trading halt. Peet’s board has unanimously recommended the proposal, subject to there being no superior offer.
Ingenia Communities Group has offered to acquire all shares of Australian residential property developer Peet for AUD 992.5 million (USD 710.93 million), as it looks to expand its scale and exposure to land lease development.
Under the proposal, Peet shareholders will receive AUD 0.68 in cash and 0.3367 Ingenia stapled securities for every Peet share held. The implied offer value is AUD 2.12 per share, representing a 17.1% premium to Peet’s closing price before the company’s shares entered a trading halt.
Peet shareholders will be able to choose between receiving the consideration entirely in cash, entirely in Ingenia securities or a combination of both under a mix-and-match facility.
Peet’s board has unanimously recommended the proposal, provided no superior offer emerges. Ingenia said Peet’s largest shareholder, Scorpio Nominees Pty Ltd, also intends to accept the offer.
Established in 1895, Peet is one of Australia’s leading residential master-planned community developers and has one of the country’s largest development pipelines.
As part of the transaction, Ingenia has also signed a term sheet with Brown-Neaves Investments for the sale of a 49.9% stake in Peet’s Flagstone City project. The transaction values the project at an enterprise value of AUD 615 million on a 100% basis.
Ingenia CEO John Carfi said the proposed stake sale would help fund the acquisition and also reflects the value of Peet’s development pipeline.
Flagstone City is a master-planned city project in southeast Queensland that is being developed as a self-contained urban centre. The project is planned to include residential housing, retail space, commercial offices, health services, education facilities and entertainment areas.
Carfi said the combined transactions would increase Ingenia’s scale and its exposure to land lease development, while providing growth opportunities beyond the company’s existing five-year plan.
The proposed acquisition comes as Australia’s residential property market faces softer sales volumes and prices. The market is also adjusting to changes announced in the federal government’s May budget, which reduced tax concessions available to investment property owners.
Source Reuters
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