Avid and Villa World agree $293m takeover deal

Avid and Villa World agree $293m takeover deal

12 July 2019

ASX-listed residential developer Villa World has agreed to a takeover by private equity-backed Avid Property Group, following an unanimous recommendation by the board of Villa World.

Villa World has agreed to a $2.345 share takeover, the higher revised price to the initial offer of $2.23 a share lobbed in March when Avid made its first approach. With 125.2 million shares outstanding, the offer would be worth $293.6 million.

The house and land developer’s shares closed at a strong $2.32 on Monday morning following the announcement, a lift from $2.28 at close of Friday.

Villa World has entered into a binding Scheme Implementation Agreement for the takeover following the completion of due diligence by Avid, formerly Investa Land but now owned by private equity group Proprium.

Mark Jewell, Independent Chair of Villa World, said: “We are proud of what Villa World has created over a long and successful journey. We’re pleased to be entering into a binding transaction with AVID today which provides our shareholders the opportunity to realise their investment in Villa World at an attractive and certain price. Once the Scheme is implemented, shareholders will receive a cash payment at a meaningful premium to the trading price of Villa World shares prior to the announcement of the initial AVID proposal.”

The board concluded the takeover was in the best interests of Villa World shareholders and has recommended shareholders vote in favour of it at a meeting in October.

Avid, led by Cameron Holt, has been on a chase for assets and growth since it was taken over by Proprium Capital Partners in 2015. Back then, it expressed its intentions to focus on the house and land business which reflects its interest in Villa World. The Queensland-based Villa World has housing communities across the eastern seaboard of Australia.

The US-based Proprium Capital Partners in turn is a real estate fund manager spun out from Morgan Stanley in 2013. 

Craig Treasure, CEO and Managing Director of Villa World said: “Our real strength has been our commitment to people, helping them reach home. The proposed transaction is an endorsement of the quality of our brand and the relationships we’ve built with customers, staff, suppliers and contractors, shareholders and the broader community. The combination of our business with AVID, bringing together the best of both companies, will provide an enhanced proposition for our customers and staff.”

Anthony Kingsley, Chair of AVID, said: “Villa World’s innovative housing platform and exposure to greenfield east coast growth corridors positions AVID to scale up across a larger portfolio of assets and future built form opportunities. Combining those assets with AVID’s access to capital and global property expertise will position the business to deliver on our growth and diversification strategy, with outstanding outcomes for customers.”

Cameron Holt, CEO of AVID, said: “This acquisition strategically combines two strong performing and complementary businesses with recognised brands and market leading technical and service propositions. Leveraging the talent, expertise and systems of both businesses will create a stronger, better platform from which to grow.”

The takeover price will give Villa World shareholders a 17.8 per cent premium to Villa World’s closing price of $1.99 on March 14 – its lowest in a while – when Avid first approached Villa World.

Avid expects to fund the takeover with cash raised from internal resources, equity contributions and existing debt facilities. It is not conditional on Avid securing funds.