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Why Gateway Lifestyle Group (ASX:GTY) just rejected Hometown’s takeover offer

It will be interesting to see what investors make of the latest development out of the Hometown Australia takeover offer for residential park management company Gateway Lifestyle Group (ASX: GTY) after more updates hit the ASX yesterday.

Hometown has confirmed it is not proceeding with its conditional 5c price increase to its takeover offer for Gateway,

On July 2 Hometown announced its intention to make a conditional off-market cash takeover offer for 100% of stapled securities in Gateway at $2.25 per security, on the same day reporting it would increase the offer price by 5c to $2.30 if a bid implementation agreement was executed by Gateway.

The announcement today confirmed Hometown and Gateway had not reached agreement in regards to the bid implementation and Hometown will renege on its 5c per security increase offer and continue with its $2.25 offer only.

Gateway say Hometown’s bid “unduly constrained” its operations and is not in the interests of shareholders and it would not pursue arrangements despite being “encouraged” by interest in the business.

Gateway comes up against peers like Ingenia Communities Group (ASX: INA), Aveo Group (ASX: AOG) and Lifestyle Communities Limited (ASX: LIC) in the competitive retirement lifestyle communities sector.

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