Real Estate company Villa World Limited (ASX: VLW) receives the offer to sell all its shares to a private property development group, AVID.
In the announcement dated 15 March 2019, Villa World Limited told that it has received an unsolicited proposal from AVID Property Group Australia Pty Ltd (AVID) to acquire all of the shares in Villa World at a consideration of $2.23 per share.
However, the offer price of $2.23 per share is stated to be adjusted for the 1H19 dividend of $0.08 per share that has Ex-date of 12 March 2019 and Payment date of 2 April 2019.
The offer has been made through Indicative Proposal which is also conditional, incomplete and has a non-binding expression of interest. This proposal has assumed that Villa World’s capital is and remains to 125.5 million shares and 2.0 million performance rights.
In its Indicative Proposal, AVID stated that Villa World’s exposure to greenfield growth corridors on Australia’s east coast fits well with AVID’s strategic ambitions to expand its existing platform and that it views the two platforms as being highly complementary.
AVID has requested access to Villa World’s information for the purpose of conducting due diligence. And if the due diligence goes through, any resulting transaction would be subject to FIRB approval, other regulatory approvals, the unanimous recommendation of the Villa World’s Board to be followed by shareholders’ approval.
To fund the transaction, AVID Property Group has confirmed that it 100% of Villa World acquisition would be financed from internal resources, equity contribution from AVID’s shareholders and debt facilities.
AVID Group is an Australian property development group that has diversified business with a portfolio of $3 billion of broadacre and medium density residential and industrial projects. The Group is owned by several international institutional investors whose investments in AVID is well managed by US-based fund manager Proprium Capital Partners.
The proposal has further assumed that Villa World is not being involved in any material transactions, litigation or contractual or regulatory breaches and it would not divest any material assets after the date of the Indicative Proposal.
Currently, Villa World is in the process of appointing advisors. The Board confirmed that it is committed to maximising value for all its security holders, and has commenced an assessment of the Indicative Proposal.
The company has asked its shareholders not to take any action in relation to this offer. It said: “There is no guarantee that following the Board’s consideration of the Indicative Proposal that AVID will be granted diligence or that the Indicative Proposal will result in a transaction or that the Board will recommend any proposal.”
In today’s trading session, VLW stock price has jumped up by 9.045% to trade at $2.170 on 15 March 2019 (12:35 PM AEST). The stock is currently trading at a Price to Earnings multiple of 5.730x with a market capitalisation of $249.07 million.
Over the past 12 months, the stock has fallen by 19.76% despite the surge of 19.52% in the past three months.
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