Here’s why the Home Consortium (ASX:HMC) share price is up 8% so far this week

ASX M&A activity is constantly gaining steam.

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The Home Consortium Ltd (ASX: HMC) share price is edging higher today, currently changing hands at $8.11.

That earmarks an 8.1% gain for the property giant so far for this week, after climbing 2.2% in the past month.

Why is the Home Consortium share price charging 8% higher this week?

Home Consortium shares jumped from the start of trade this week after the company announced fellow retail centre owner Aventus Group (ASX: AVN) advised of its plans to merge with the company and HomeCo Daily Needs REIT (ASX: HDN).

Under the proposal, Aventus shareholders would receive an implied value of $3.82 made up of 2.2 HomeCo Daily Needs shares and an option of either 0.038 Home Consortium shares or $0.285 in cash for each Aventus share owned.

A forging of giants of this magnitude will lead to a combined portfolio size of more than $4 billion and a market capitalisation of more than $3 billion.

For Home Consortium, the juice is even more worth the squeeze as the deal “significantly accelerates [the company’s] growth and scale” with its external assets under management (AUM) increasing to approximately $5 billion.

That’s a 127% up-step from FY21 and 12 months ahead of the company’s previously outlined $5 billion 2022 target.

As a result of the intentions, Home Consortium updated its FY22 guidance for funds from operations (FFO) per security by 41% to 26 cents – an almost 90% growth schedule from FY21.

If successfully executed, Home Consortium will have a 13.5% interest in the merged group, however, will externally manage the new entity nonetheless.

The merger is conditional on a series of key milestones being met. At this stage, the implementation date is pencilled in for February 2022.

The Home Consortium share price is edging 5.6% higher in afternoon trade today in what appears to be a response to yesterday’s announcement.

Home Consortium share price snapshot

The Home Consortium share price has soared 99% this year to date, extending its gain in the past 12 months to more than 145%.

This is well ahead of the S&P/ASX 200 Index (ASX: XJO)’s gain of around 19% over the same time.

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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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