Villa World Limited (ASX: VLW) has been in discussion with AVID Property Group Australia Pty Ltd (AVID), a diversified Australian property development, in relation to the acquisition of Villa World by AVID.
Earlier on 14 March 2019, the company received an unsolicited proposal from AVID to acquire all of the shares in Villa World at $2.23 per share by way of a scheme of arrangement. Later on 2nd May 2019, the company received a revised proposal to acquire all of the shares in Villa World for an increased offer price of $2.3451 per share, representing an increase of 11.5¢ per share relative to the previous proposal.
The cash price of $2.345 per Villa World share is representing 17.8% premium to the Villa World closing share price of $1.99 on 14 March 2019, being the last closing price of Villa World shares prior to the announcement of the Prior Proposal.
After carefully reviewing the revised proposal, the Board of Villa World has advised that the revised proposal is providing shareholders with certainty of value and the opportunity to realise a meaningful premium to the market value of their shares. Therefore, the Board has unanimously recommended the shareholders to vote in favour of the Revised Proposal and it has granted AVID access to due diligence, exclusively on customary terms, for a limited period expected to expire around the middle of June 2019 to enable AVID to progress its Revised Proposal and facilitate a binding proposal.
The Revised Proposal is subject to various conditions and till now there is no guarantee that the Revised Proposal will result in a transaction which is why the company has advised its shareholders to not take any action in relation to the Revised Proposal at this stage.
For the half year ended 31 December 2018, the company reported a 1H19 statutory net profit after tax of $17.6 million compared with the prior period’s result of $17.3 million. During the half year period, the group generated strong net cash flows from trading activities of $85.4 Mn which supported expenditure of $19.1 million on the acquisition of new land while retaining a strong cash and debt position.
Today (2 April 2019), the company paid an interim dividend of 8 cents per share (fully franked) to its shareholders.
In the second half of FY19, the company is focusing on operational delivery and cash settlement of carried forward sales. In FY19, the company is expecting its gross margin to be within the range of 23% to 25%.
Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. The stock is trading at a price of $2.285, up by 3.864% during the day’s trade with a market capitalisation of ~$275.35 Million as on 2 May 2019 (AEST 2:53 PM). The stock has provided a year till date return of 25.00% & also posted returns of 8.91%, 17.65% & -0.90% over the past six months, three & one-month period respectively. It had a 52-week high price of $2.510 and touched 52 weeks low of $1.550, with an average volume of ~424,177.
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