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.