Private equity firm Warburg Pincus has swooped in with a buyout offer for Ingenia Communities Group (ASX: INA) just days after the real estate investor's shares fell sharply on its own takeover deal.
Shares in Ingenia dipped after it revealed plans in late August to acquire Peet Ltd (ASX: PPC), one of Australia's leading master planned community developers.
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Ingenia's own deal out of favour
Ingenia shares fell from levels above $4 following the announcement of the deal and last traded at $3.65 before Warburg Pincus announced its deal.
That offer is for $4.75 in cash per share. Ingenia shares were up 13.7% to $4.15 in early trade on Monday.
Ingenia said in a statement to the ASX that the Warburg Pincus deal was subject to numerous conditions, including a unanimous recommendation from its board and the Peet deal not proceeding.
The Ingenia board said that after thorough consideration, it had determined that the offer "substantially undervalues Ingenia and is not in the best interests of its security holders''.
The company added:
The Board is confident in Ingenia's strategic direction and growth trajectory. There are strong long-term structural tailwinds supporting continued growth in the land lease communities sector and the attractiveness of Ingenia's holiday parks business in providing affordable holiday accommodation. Ingenia believes there are significant opportunities to continue to grow its business, enhance the scale and efficiency of its platform, and deliver long term value to its security holders. The Ingenia Board considers that the proposed acquisition of Peet is an important component of Ingenia's strategy, securing a significant development pipeline which is expected to support Ingenia's growth and product delivery over time.
Peet deal to grow scale
Ingenia is offering Peet shareholders 68 cents per share as well as 0.3367 Ingenia shares per Peet share.
The Peet board has unanimously approved the deal, subject to an independent expert's report.
Ingenia said regarding the deal:
The transaction has strong strategic and financial rationale for both sets of securityholders, creating a leading national land lease platform and expanding Ingenia's presence in the complementary master planned community sector.
Ingenia Communities Chief Executive Officer John Carfi said the deal was a "unique opportunity" to create a high-quality development pipeline on attractive terms.
He added:
The transaction delivers on our core strategic goals, increasing our scale and exposure to land lease development, creating a national platform, accelerating and securing growth beyond our 5-Year Plan, as well as delivering a logical extension to our living strategy that responds to the evolution of the residential sector.
