Avid fan of Villa World
Fund manager makes play for GC developer
THE Australian arm of an international fund manager has launched a bid for Gold Coast developer Villa World – valuing the company at close to $280 million.
The proposal, which Villa World has stressed is conditional and a long way from receiving the board’s blessing, forms part of Avid Property Group’s plans to expand its presence on the East Coast.
Avid, formerly Investa Land, was bought by Proprium Capital Partners in 2015 and says it has a pipeline of $3 billion worth of broad acre and medium-density residential and industrial projects.
It has indicated it would offer $2.231 per share to acquire all 125 million securities in Villa World.
That is a 10 per cent premium to the $1.99 share price at closing yesterday.
Villa World, which reported a profit of $17.6 million for the half year, said it had appointed advisers to consult on the deal, which it said was subject to a range of conditions, including due diligence.
“There is no guarantee that following the board’s consideration of the proposal that Avid will be granted diligence or that the proposal will result in a transaction or that the board will recommend any proposal,” Villa World said.
The proposal states that it is not a public announcement of an intention, or a public proposal, to make a takeover bid.
The board made no statement on the viability of the offer other than to say it was committed to maximising shareholder value.
The company said Avid considered both companies as being complementary.
Villa World, which is headed by managing director Craig Treasure, has a number of projects in Queensland, at Strathpine, Logan and Arundel on the Gold Coast. It reported 1126 sale contracts carried forward with a gross value of $340.4 million, with settlements from now until 2021, for the half year.
Avid’s projects include a $583 million masterplanned community in Chisholm, NSW, and a development at Palmview on the Sunshine Coast.
Villa World’s shares plunged 15 per cent in December after it warned of deteriorating market conditions.
That came after it announced a share buyback, of 5 per cent of its shares, to shore up its stock price.
Villa World, which has enjoyed a five-year streak of fullyear profit growth, did not provide a full-year guidance for this year, citing the challenging market conditions and availability of customer credit as well as uncertainty caused by upcoming Federal and New South Wales elections.