Gateway Lifestyle Group (ASX: GTY) Accepts Hometown Takeover Bid

  • Oct 09, 2018 AEDT
  • Team Kalkine
Gateway Lifestyle Group (ASX: GTY) Accepts Hometown Takeover Bid

The battle for control of the budget home manufacturer Gateway Lifestyle Group has finally been rested with the win of US giant Hometown America.

The long-standing bidding war between Hometown and its rival Canada’s Brookfield reaches the fining line on Tuesday, after the US player succeeded with a $2.25 per share cash bid to acquire Gateway at $685 million.

At the close of the buy-out offer, Hometown America seized the total control of 94.88% in Gateway Lifestyle Group. This reflects all that Hometown required to get the Gateway Group off the official list of Australian Securities Exchange. As stated in previous release by Gateway, the bidder Hometown needed to have more than 75% holdings in Gateway to implement its plan to take the company private.

The heat to acquire Gateway business was led with the growing interest for its manufactured home estates model typically aimed on budget-conscious retirees. At the start of bidding war in mid-June this year, Australian arm of US based Hometown initiated $2.10 per share offer which was toppled by Brookfield’s proposal at $2.20 per share. But eventually, Brookfield’s better offer was rejected by the GTY Board.

The final bid of $2.25 per share was declared by the Hometown in August after its higher proposal of $2.30 per share, conditional on Board’s support, had lapsed.  

Hometown is a subsidiary of Chicago headquartered Hometown America Corporation that owns and operates manufactured housing communities across the Unites states.

In August, the Gateway Board recommended its shareholder to accept the Hometown’s significantly less conditional offer placed at $2.25 per share after the independent expert assessed it to be in the best interest of Gateway’s shareholders.

In the recently released results for the financial year 2018, Gateway posted statutory net profit after tax of $58.2 million, down from $59.7 million in FY17. The distributable earning of the group in increased by 2.9% to $40.7 million.

Gateway Lifestyle Group confirms the final distribution of 5.35 cents per stapled security which takes total distribution to 9.1 cents, equivalent to prior year. The final distribution had a deferred tax component of 47.4 for the six-month period to 30 June 2018.

As at 30 June 2018 the annualized long-term rental revenue of GTY was $55.2 million from 7,180 long-term occupied sites at an average weekly rent of $147.9, which was $142.4 in FY17. During FY18 the group has acquired two operating communities acquired in Victor Harbor in South Australia and two greenfield sites at Evans Head, New South Wales and Yarrawonga, Victoria.

The Annual General Meeting of Gateway Lifestyle Group is due to be held on 29 November 2018 at Wesley Conference Centre, Sydney. The AGM of shareholders of Gateway Lifestyle Operations Limited is reported to be held in conjunction with a General Meeting of unit holders of Residential Parks.

Today, 9 October 2018, the stock of Gateway Lifestyle Group last traded at $2.250 which valued the company for $684.63 million. It has been seen that in the past one-year GTY’s stock has shown a decent performance change of +14.80%, but it is dipping down since last three months.

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