Why Did AVJennings Shareholders Embrace a $0.655 Cash Takeover?
AVJennings shareholders have overwhelmingly approved a scheme of arrangement for a $0.655 per share cash acquisition by Proprium Capital Partners and AVID Property Group, marking a significant premium and a pivotal moment for the residential property developer.
- Scheme approved for acquisition at 65.5 cents per share cash
- Board unanimously recommends scheme; Independent Expert endorses
- Potential special dividend of up to 16.7 cents per share under consideration
- Shareholders also approve CEO share issue tied to performance rights
- Implementation targeted for 14 August 2025, pending court approval
Scheme Meeting Outcome
On 11 July 2025, AVJennings Limited (ASX, AVJ) convened a pivotal Scheme Meeting and Extraordinary General Meeting in Sydney, where shareholders voted on a proposed scheme of arrangement. The scheme, under which PM Nominees C Pty Ltd; an investment vehicle of Proprium Capital Partners and AVID Property Group; will acquire all shares in AVJennings, received overwhelming support. Shareholders approved the acquisition at a cash price of 65.5 cents per share, representing a substantial premium over the company’s undisturbed trading price and a near doubling from the share price prior to the bid announcement in November 2024.
Board and Expert Endorsement
The AVJennings Board, led by Chairman Simon Cheong, unanimously recommended the scheme, emphasizing the certainty and attractive premium it offers shareholders. This endorsement was bolstered by an Independent Expert report from Kroll Australia, which concluded the scheme is in shareholders’ best interests absent any superior proposal. The Board also highlighted the benefits of a 100% cash consideration, which eliminates market volatility risk for shareholders who choose to accept the offer.
Special Dividend and Share Issue Details
In addition to the scheme consideration, AVJennings may declare a special dividend of up to 16.7 cents per share, subject to Board discretion and a favourable ruling from the Australian Taxation Office regarding franking credits. This potential dividend could enhance shareholder value further by optimising tax benefits. Meanwhile, at the Extraordinary General Meeting, shareholders approved a resolution to issue shares to Managing Director and CEO Philip Kearns in connection with the vesting of performance rights contingent on the scheme’s implementation. The value of these shares is estimated at over $2.15 million, reflecting the Board’s commitment to aligning executive incentives with shareholder outcomes.
Next Steps and Timetable
With shareholder approval secured, the scheme now awaits final approval from the Supreme Court of New South Wales and satisfaction of customary conditions. The parties are targeting implementation on 14 August 2025. AVJennings is also preparing its audited FY2025 accounts, which will be released in due course. The Board confirmed no superior proposals have emerged since the initial announcement, but the market will watch closely for any late developments.
Market Implications
This transaction marks a significant milestone for AVJennings, potentially transitioning the company into new ownership under Proprium Capital Partners and AVID Property Group. The premium offered and the cash nature of the deal provide certainty for shareholders amid ongoing market volatility in the residential property sector. However, the final outcome hinges on court approval and the successful navigation of regulatory and tax considerations related to the special dividend.
Bottom Line?
As AVJennings moves toward finalising this transformative deal, investors will be watching closely for court approval and the special dividend decision that could further sweeten returns.
Questions in the middle?
- Will the Supreme Court of New South Wales approve the scheme without conditions?
- What quantum will the Board ultimately declare for the special dividend, and will the ATO grant a favourable ruling?
- Could any late superior proposals emerge to challenge the current scheme?
