Warburg Pincus Raises Ingenia Bid to A$5.50, Topping Brookfield-Led Rival Offer
Warburg Pincus has lifted its takeover offer for Ingenia Communities Group to A$5.50 per stapled security, topping the rival bid from a consortium led by Brookfield and Avid Property Group. The revised bid values Ingenia’s equity at A$2.24 billion and extends a bidding war for the A$3 billion portfo
Warburg Pincus has raised its takeover offer for Ingenia Communities Group for a third time, topping a rival bid from a group led by Brookfield and local player Avid Property Group, and extending a bidding war for A$3 billion in land lease communities and holiday parks.
The New York-based private equity firm’s revised, non-binding proposal of A$5.45 cash per stapled security would also let securityholders keep a half-year distribution of up to A$0.05, taking the potential payout to A$5.50, according to an ASX filing from Ingenia on Wednesday. That is A$0.10, or 1.85 per cent, more than the Avid consortium’s offer, and values Ingenia’s equity at A$2.24 billion (US$1.6 billion).
Warburg Pincus has lined up two Australian partners for its enhanced Ingenia bid, with each player targeting a separate element of the company. The US private equity giant would acquire Ingenia’s land lease communities business, and Discovery Parks, which is backed by superannuation fund Australian Retirement Trust (ART), would take the holiday parks portfolio. Ingenia Gardens, the group’s smaller portfolio of rental villages for seniors, would go to a third partner in the deal, LDR Capital, part of the Lederer family office chaired by billionaire Paul Lederer that manages about A$3 billion of assets.
Ingenia’s board said the offer is, or could reasonably be considered to become, a superior proposal under its process deed with Avid, which is controlled by US fund manager Proprium Capital Partners. Ingenia has reopened due diligence to Warburg Pincus and its co-investors. Avid now has until Sunday, 1 November, to match or better the offer.
Warburg Pincus had declared its previous A$5.25 offer best and final on 15 October, absent a superior proposal. The firm said it considers Avid’s offer to be a superior proposal under that statement, permitting the firm to increase its price. Warburg Pincus opened with a A$4.75 per security bid in September. It then raised its offer twice before Avid’s A$5.35 approach on Monday. The latest offer is a 47.7 per cent premium to Ingenia’s last closing price of A$3.69 on 28 August, the last trading day before Warburg Pincus’ initial proposal was publicly announced.
Several conditions are attached to the new Warburg Pincus bid. Ingenia must approve Discovery Parks and LDR Capital as co-investors. Subject to Avid’s matching right, Ingenia must also terminate its process deed with Avid and sign one with Warburg Pincus, and grant the firm exclusive due diligence access by 1 November. Earlier conditions still apply, including binding debt finance commitments, final investment committee approval, approval from the Foreign Investment Review Board and the competition regulator, and termination of Ingenia’s agreement to buy Peet.
Ingenia manages an A$3 billion portfolio across 96 communities and development sites, spread across its lifestyle, gardens, and holiday parks businesses. The group has a pipeline of 8,800 potential new land lease home sites. Ingenia’s board said it has not determined that the Warburg Pincus offer is superior to its pending acquisition of Peet, and it continues to work towards completing that deal. Walking away from the A$992.3 million agreement to buy the Perth-based homebuilder would leave Ingenia owing Peet an A$10 million reverse break fee.
