HomeCo Daily Needs REIT (HDN) has announced that HDN and Home Consortium (HMC), (together HomeCo) have entered into a binding Scheme Implementation Deed (SID) with Aventus Group (AVN) to acquire all AVN securities via schemes of arrangement, subject to certain conditions. The merger will see both business combine expertise and capabilities to be the leading large format retail asset manager in Australia.
The combined business will have just under half of Australia’s entire population living within 10 kilometres of its centres, a 2.5 million square metre landbank and centres comprising of 84% national tenants representing the strongest brands in large format retail.
Both boards unanimously support the merger and believe it represents a unique and compelling opportunity to create significant value for both HDN unitholders and AVN securityholders. The merger will create Australia’s leading Daily Needs REIT (the Merged Group) with a combined portfolio size of $4.1 billion and market capitalisation of approximately $3.2 billion. The merger brings together HDN and AVN’s highly complementary portfolios with strong strategic rationale.
HDN Chair, Simon Shakesheff said, “We believe the merger is strategically and financially attractive for both HDN and AVN and consistent with HDN’s objective to deliver stable and growing distributions. The increased scale and enhanced capability will allow the merged group to unlock significant value that would not have been accessible on a standalone basis.”
AVN Chairman, Bruce Carter said, “The Merger is attractive for Aventus securityholders, both because of the potential offered by being part of the larger merged groups and because the offer reflects a material premium to Aventus’ trading price and its NTA. After careful consideration, the Aventus Board has concluded that the merger is in the best interests of Aventus securityholders (other than excluded securityholders) and unanimously recommends that Aventus securityholders (other than excluded securityholders) vote in favour of the merger, subject to no superior proposal emerging and the Independent Expert concluding in the Independent Expert’s Report (and continuing to conclude) that the Merger in the best interests of Aventus securityholders (other than excluded securityholders)”.
HomeCo will acquire all AVN securities via schemes of arrangement, subject to certain conditions including AVN securityholder approval and HDN unitholder approval. Under the terms of the Merger, AVN securityholders will receive consideration with an implied value of $3.822 per AVN security (Offer Price), comprising:
- 2.200 HDN units for every 1 unit in Aventus Retail Property Fund (ARPF); and
- $0.285 cash or 0.038 HMC securities for every 1 share in Aventus Holdings Limited (AHL)
Each AVN securityholder may elect to receive cash or HMC securities as consideration (but not a combination of both) with default consideration being cash.
BBRC Retail Capital Pty Ltd and associated entities (BBRC) currently holds a voting interest in approximately 22.6% of all AVN securities. BBRC has confirmed to AVN that, based on disclosed terms of the merger intends to vote in favour of the schemes in the absence of a superior proposal.
HMC CEO and Managing Director, David Di Pilla said, “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 $4.1bn portfolio of last mile logistics infrastructure in Australia’s leading metropolitan growth corridors. This transaction is consistent with our strategy to build high quality portfolios exposed to powerful megatrends and enhanced by best-in-class management teams.”
Di Pilla said, “For HMC, the transaction demonstrates the scalability of our platform and our ability to execute large scale M&A transactions to significantly grow external AUM. This transaction positions HMC well ahead of its stated target to grow external AUM to $5 billion by the end of 2022.”
The merger brings together HDN and AVN’s highly complementary portfolios and significantly increases HMC’s growth and scale with external AUM well ahead of HMC’s stated $5 billion 2022 target, underscoring the scalability of the HMC platform.
The targeted implementation date is mid February 2022, with the first court hearing occurring in mid December this year.