Brookfield and Avid Top Warburg Pincus With A$2.2B Bid for Ingenia
Brookfield Asset Management and Sydney-based Avid Property Group have made a A$2.2 billion (US$1.6 billion) buyout offer for Ingenia Communities Group, topping a rival bid from Warburg Pincus. The A$5.35 per security offer, which also allows securityholders to keep a half-year distribution, has won
Brookfield Asset Management has teamed up with an Australian property group backed by US real estate investor Proprium Capital Partners to make a A$2.2 billion (US$1.6 billion) buyout offer for Ingenia Communities Group, topping a rival bid from Warburg Pincus.
Sydney-based Avid Property Group made the unsolicited, non-binding offer of A$5.35 cash per Ingenia stapled security, according to an ASX filing on Monday. Avid would also let securityholders keep a half-year distribution of up to A$0.05, taking the potential payout to A$5.40 per security. Warburg Pincus had offered A$5.25 per stapled security.
Avid has the backing of a global financial sponsor, which a person familiar with the deal confirmed is Brookfield, and an unidentified sovereign wealth fund, according to the filing. Ingenia's board has granted Avid six weeks of "soft" exclusivity, and has terminated Warburg Pincus' data room access. The board said it has not determined that the Avid proposal is superior to its pending acquisition of Perth-based homebuilder Peet, and is continuing to work towards completing that deal.
The offer from Avid and Toronto-headquartered Brookfield pushes aside New York-based Warburg Pincus' pursuit of Ingenia's A$3 billion portfolio of land lease communities and holiday parks, which spans 96 projects and development sites. Avid's bid is also being backed by Abu Dhabi's sovereign wealth fund, according to a report in The Australian.
"Ingenia has built a high-quality business with a leading position in the land lease communities sector and an attractive portfolio of communities across Australia," Avid chief executive Anthony Demiris said in a statement. "With backing from our investment partners, we believe this proposal delivers compelling value for Ingenia securityholders and a quality future for the business."
Avid's bid is 1.9 per cent above the A$5.25 per security that Warburg Pincus declared as its best and final offer on 15 October, and 46.6 per cent above Ingenia's A$3.65 closing price on 4 September, the benchmark for Warburg Pincus' opening bid. Ingenia's securities rose 5 per cent to A$5.00 in Sydney trading on Monday.
Avid plans to transfer Ingenia's holiday parks business to Tasman Holiday Parks once the takeover is implemented, the filing said. Avid's offer is conditional on due diligence, a unanimous recommendation from Ingenia's board, approvals from the Foreign Investment Review Board and the competition regulator, and sign-off from Avid's own board and investment committee. Ingenia would also have to terminate its agreement to buy Peet, which would leave it owing Peet a A$10 million reverse break fee.
