AVJennings Limited has announced a proposed $0.655 per share acquisition scheme by PM Nominees C Pty Ltd, an investment vehicle of Proprium Capital Partners and AVID, offering shareholders a near 100% premium over recent trading prices. The scheme, supported unanimously by the board and an independent expert, awaits shareholder and court approval.
- Proposed acquisition at $0.655 cash per share
- Scheme includes potential fully franked special dividend up to $0.167 per share
- Independent expert values shares between $0.54 and $0.61, confirming scheme fairness
- Shareholder meeting scheduled for 11 July 2025
- Acquisition subject to regulatory approvals and court sanction
Overview of the Proposed Scheme
AVJennings Limited (ASX: AVJ), a seasoned player in the Australian residential property development sector, has unveiled a definitive proposal for acquisition by PM Nominees C Pty Ltd, an investment vehicle controlled by Proprium Capital Partners and AVID. The transaction is structured as a scheme of arrangement offering AVJennings shareholders $0.655 cash per share, representing a substantial premium of approximately 98.5% over the last undisturbed closing price prior to the proposal announcement.
In addition to the cash consideration, the AVJennings Board retains the discretion to declare a fully franked special dividend of up to $0.167 per share, subject to regulatory and lender approvals. This dividend, if declared, could provide shareholders with additional value through franking credits estimated at approximately $0.072 per share.
Board and Independent Expert Endorsement
The AVJennings Board has unanimously recommended that shareholders vote in favor of the scheme, contingent on the absence of a superior proposal and the independent expert's continued endorsement. Kroll Australia Pty Ltd, appointed as the independent expert, has concluded that the scheme is in the best interests of shareholders, assessing the value of AVJennings shares between $0.54 and $0.61 on a fully diluted basis. The proposed scheme consideration exceeds this range, reflecting a control premium and anticipated synergies.
Notably, SC Global Developments Pte Ltd, the largest shareholder with a 54.02% stake, has confirmed its intention to support the scheme, further bolstering the proposal's prospects.
Conditions and Approvals
The implementation of the scheme is subject to several conditions precedent, including shareholder approval by the requisite majorities at the scheme meeting scheduled for 11 July 2025, court approval by the Supreme Court of New South Wales, and regulatory clearances from the Australian Foreign Investment Review Board (FIRB) and the New Zealand Overseas Investment Office (OIO). The scheme meeting will be conducted as a hybrid event, allowing shareholders to participate in person or online.
Following the scheme meeting, an extraordinary general meeting will be held to approve a share issue to AVJennings’ CEO, Philip Kearns, in connection with the accelerated vesting of performance rights contingent on the scheme's effectiveness.
Implications for Shareholders and Market
If approved and implemented, the scheme will result in AVJennings becoming a wholly-owned subsidiary of the Bidder and subsequent delisting from the ASX and SGX. Shareholders will receive cash consideration and any declared special dividend but will forgo future exposure to AVJennings’ business and potential upside.
Shareholders are advised to carefully review the scheme booklet, including the independent expert report, and consider their individual financial and tax circumstances before voting. The scheme offers certainty of value amid a challenging property market environment marked by rising interest rates, supply chain constraints, and affordability pressures.
Risks and Considerations
Key risks include the possibility that regulatory approvals may be delayed or not obtained, the emergence of a superior proposal, and the inherent volatility of the property development sector. The special dividend declaration remains at the board's discretion and is subject to favorable tax rulings and lender consents.
Should the scheme not proceed, AVJennings will continue as a listed entity, with its share price likely to reflect current market conditions and potentially trade below the scheme consideration.
Bottom Line?
As AVJennings shareholders prepare to vote, the market awaits regulatory clearances and any competing bids that could reshape the company’s future.
Questions in the middle?
- Will regulatory approvals from FIRB and OIO be secured without delay?
- Could a superior proposal emerge before the scheme meeting on 11 July 2025?
- How will the potential special dividend and associated franking credits impact shareholder returns?