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Brookfield to acquire Aveo
Posted on Wednesday, 14 August 2019 11:14
Australian retirement homes operator Aveo Group is a target after Brookfield Property Group agreed to acquire the business. Under the terms of the deal, the buyer, which will carry out the transaction through its Hydra RL BidCo and Hydra RL TopCo entities, will pay AUD 2.19 (USD 1.48) per item of stock in the company. The approach represents an 8.4 per cent premium over Aveo’s close of AUD 2.02 on 9th August, the last trading day prior to the bid being announced, and values the business at AUD 1.27 billion. Aveo’s board has already unanimously recommended that shareholders vote in favour of the offer after ruling that it is in their best interests. A scheme alternative will be sent to the target’s investors early in October of this year, with the scheme to be implemented during 2019, if approved. Under the terms of the agreement, shareholders in Aveo can instead opt to accept a scrip alternative, as part of which they will have the possibility of participating in a stub equity vehicle which would give them future exposure to the company. Aveo has a history dating back 25 years and provides retirement living and care options to customers in Australia. The company has in excess of 13,000 residents across more than 90 communities. It recorded profit before tax of AUD 4.80 million during the first half of 2019, down from the AUD 41.70 million generated over the corresponding timeframe of 2018. An acquisition of Aveo was first reported almost a year ago; in August 2018, the firm announced a strategic review of its operations, with Metrica Partners urging it to use the opportunity to review its relationship with major shareholder Mulpha International. Since then, a number of potential suitors have been named in connection with bids, with reports suggesting that Mulpha itself, as well as the likes of Blackstone and TPG Capital Advisors, were in the running. Zephyr, the M&A database published by Bureau van Dijk, shows that the largest deal targeting an operator of assisted living facilities for the elderly to have been announced worldwide in 2019 saw Sofina sell a 1.6 per cent stake in Orpea to undisclosed investors for USD 369.82 million in May. © Zephus Ltd