AVJennings announces A$0.67 per share takeover proposal by Proprium Capital Partners

AVJennings Limited, one of Australia’s leading property developers, has confirmed it is considering an all-cash takeover proposal from Proprium Capital Partners. The proposal, put forward through Proprium’s affiliate, AVID Property Group, values AVJennings shares at AUD $0.67 each, representing a significant 103% premium over the company’s last closing price of AUD $0.33 on 27 November 2024.

The offer is presented as a scheme of arrangement, enabling shareholders to realise immediate cash returns at a substantial premium. The AVJennings Board disclosed that it has entered into an exclusivity deed with AVID Property Group, which secures exclusive negotiation rights for the potential buyer until January 2025. This exclusivity allows AVID to conduct confirmatory due diligence, which is critical to finalising the deal.

While non-binding and conditional, the proposal carries considerable appeal for shareholders. It is designed to allow for the payment of a fully franked special dividend of up to AUD $0.06 per share. However, the offer price will be adjusted to reflect any such dividends distributed before the scheme’s implementation. The deal’s structure highlights Proprium Capital Partners’ intent to deliver value to AVJennings shareholders while ensuring compliance with regulatory and corporate governance requirements.

The transaction remains subject to critical milestones, including approvals from the Australian Foreign Investment Review Board and the New Zealand Overseas Investment Office, as well as an independent expert’s confirmation that the proposal is in the best interest of shareholders. According to AVJennings, its directors plan to recommend the scheme to shareholders, provided no superior proposal emerges and the offer terms align with the company’s objectives.

Proprium Capital Partners, known for managing approximately AUD $4 billion in assets globally, views this acquisition as a strategic expansion through its flagship entity, AVID Property Group. AVID, one of the largest privately held residential developers in Australia, already boasts a diverse portfolio valued at AUD $5 billion in gross revenue potential. Adding AVJennings’ projects to its portfolio is expected to enhance AVID’s capacity to meet Australia’s growing demand for high-quality residential developments.

Analysts observing the proposal have noted the highly competitive valuation, which includes premiums of 102% and 108% over AVJennings’ one-month and three-month volume-weighted average prices, respectively. Industry insiders believe this move reflects ongoing consolidation trends within the real estate sector, driven by the challenging economic environment and tightening credit conditions.

While the AVJennings Board has welcomed the initial proposal, it emphasised that shareholders need not take any action until further updates are provided. A formal Scheme Implementation Agreement is expected to follow, should the confirmatory due diligence conclude successfully.

This development marks a pivotal moment for AVJennings, as the company explores opportunities to unlock shareholder value amid Australia’s competitive property market. If approved, the transaction could position AVJennings under the stewardship of a globally recognised investment group, potentially accelerating its growth trajectory.