The Aveo Group Ltd (ASX: AOG) share price has led the S&P/ASX 200 (INDEXASX: XJO) gainers this morning after entering a Scheme Implementation Deed for the sale of 100% of its shares.
What did Aveo announce this morning?
Prior to market open, Aveo shares were trading at $2.02 per share but surged more than 5% higher to $2.125 per share at the time of writing.
The catalyst for the share price jump was an announcement that said that 100% of Aveo shares were to be acquired by Brookfield Property Group on behalf of its managed funds.
According to the release, Aveo shareholders would be entitled to receive cash consideration of $2.195 per security (inclusive of its FY19 annual distribution), which represents an 8.7% increase on its pre-market open price.
The entering of the Scheme of Arrangement comes after a strategic review by the company to evaluate various bids for Aveo securities.
Aveo said conditional scrip consideration is also available to Aveo shareholders, while the cash consideration represents a ~28% premium on its "undisturbed" closing price of $1.71 per share on 12 February 2019, prior to it receiving any bids.
The bid values Aveo's equity at $1.3 billion, compared to its current $1.17 billion market cap, with an enterprise value of $2.0 billion.
Aveo's directors have unanimously recommended that Aveo shareholders vote in favour of Brookfield's offer in the absence of a superior proposal, which has sent the Aveo share price surging higher this morning.
What's the story behind the deal?
Aveo has made several strategic review updates since its half-year results on 13 February 2019 as part of an ongoing look at the company's operational profile.
The Aussie owner, operator and manager of retirement communities announced that a number of indicative, non-binding takeover bids had been received in late January 2019.
Even at the $2.12 per share mark, the Aveo share price is somewhere in the middle of its 52-week trading range, with investors clearly expecting the transaction to get through any necessary regulatory approvals.
