AVID Property May Acquire AVJennings for $243.37 Million

Private equity-backed AVID Property Group, a residential property developer and operator managed by real estate private equity firm Proprium Capital Partners, said that it has submitted a non-binding proposal to AVJennings to acquire 100% of the outstanding shares in AVJ for $243.37 million, implying $0.44 per share.

AVID said that the proposal would deliver an attractive value proposition for AVJ shareholders as it provides a meaningful premium to AVJ’s recent trading, value certainty of all cash consideration and is subject to limited conditionality. The Indicative Offer implies a significant premium of 91.4% to AVJ’s last closing price as at 26 November 2024.

AVID CEO Cameron Holt, said that AVJ’s existing portfolio and its pipeline of residential communities in Australia and New Zealand will be complementary to AVID’s portfolio and growth strategy, and will add further depth to their high-quality product offering for a broad range of customers if the acquisition eventuates.

“The announcement follows the launch of our new $720 million Vantage business earlier this year, focused exclusively on Australia’s fast-growing land lease communities sector. We have expressed our intention to continue scaling our portfolio of land lease sites and today’s announcement is another important milestone in the expansion of our strategy beyond developing master-planned communities, with an AVID housing offer available no matter your stage of life,” Holt added.

However, AVID said that there is no assurance that any transaction will eventuate. The offer was intended as an expression of interest and is not intended to constitute, and does not constitute, a legally binding offer.

It may be recalled that AVID has completed the acquisition of Gold Coast-based developer Villa World for $266.79 million and is looking to add AVJennings, which has nearly 10,000 residential units, to its portfolio which comprises 45 projects in NSW, Victoria and Queensland.

Once the deal is completed, AVID’s existing portfolio will be more than tripled to 6,300 residential lots with a gross revenue of $3.25 billion and give the group exposure to the South Australian and New Zealand markets where AVJennings has its presence.

Best Price

The board of directors of AVJennings said that the proposal, subject to agreement of final terms, would provide its shareholders with an opportunity to realise their investment in the company at a price significantly above its historical trading levels with certain value through all-cash consideration.

“The directors have granted AVID access to a confirmatory due diligence period through to the end of January 2025 and exclusivity to facilitate a binding proposal, allowing for the upcoming Christmas and New Year holiday period,” the company said.

AVJennings said that it first received an incomplete preliminary offer from AVID Property Group on 2 August 2024, with the offer subject to a confidentiality agreement.

“A sub-committee of the AVJ board, in consultation with its financial and legal advisers, carefully assessed the merits of the incomplete preliminary offer and determined to grant AVID an initial period of due diligence to advance the preliminary offer,” AVJ said.