The All Ordinaries Index (ASX: XAO) is up 0.4% in early trade today with plenty of help from one rocketing ASX All Ords share.
The soaring stock in question is Melbourne-based residential development company AVJennings Ltd (ASX: AVJ).
AVJennings shares closed down 5.7% yesterday at 33 cents. Which would have been an opportune time to buy them.
In morning trade on Thursday, shares are changing hands for 63 cents apiece, up 90.9%.
Investors are piling into the ASX All Ords share following news of a potential takeover bid.
Here's what's happening.
Image source: Getty Images
ASX All Ords share leaps on acquisition offer
The AVJennings share price is flying higher after the company announced an unsolicited, incomplete and non-binding indicative proposal from Proprium Capital Partners and AVID Property Group (together, AVID) to acquire all of its shares.
AVID is offering 67 cents per share by way of a scheme of arrangement.
That's more than double yesterday's closing price and sending the ASX All Ords share soaring to multi-year highs today.
And with 557.69 million shares outstanding, the deal values the residential developer at $373.7 million.
If the deal goes through in its current form, AVJennings shareholders will receive the 67 cents per share minus any dividends they might currently be entitled to.
But investors in the ASX All Ords share could garner some extra benefits from franking credits.
According to the release:
AVID also proposes to permit AVJ to pay a fully franked special dividend on or before the scheme implementation date, allowing eligible AVJ shareholders to receive additional value of up to approximately $0.06 per share in franking credits.
The consideration paid pursuant to the scheme would be reduced by the cash amount of any such special dividend paid to AVJ Shareholders.
AVJennings directors said they've entered into an exclusivity deed with AVID to finalise the indicative proposal and the exclusivity terms that apply in this period.
The finalisation of the indicative proposal remains subject to a number of conditions. Those include approval from the Australian Foreign Investment Review Board (FIRB), as well as court and AVJennings shareholder approval.
Subject to the satisfactory completion of due diligence, the board said it intends to unanimously recommend that AVJennings shareholders vote in favour of a scheme.
Prior confidential negotiations
Management revealed that the ASX All Ords share first received a preliminary takeover offer from AVID on 2 August. They noted that "confidentiality was a condition of the preliminary offer".
The board said:
Since the initial approach, both parties have held extensive discussions and negotiations, resulting in the improved Indicative Proposal of $0.67 per AVJ share received on 27 November 2024.
Shareholders were advised that they do not need to take any action at the present time.
