AVJennings Opens Door to Ho Bee Land Amid Rival AVID Bid
AVJennings has received a new acquisition proposal from Ho Bee Land, prompting the board to grant due diligence access despite ongoing exclusivity with AVID Property Group.
- Ho Bee Land offers $0.70 per AVJennings share in a conditional, non-binding proposal
- AVJennings maintains exclusivity with AVID Property Group until January 31, 2025
- Board invokes fiduciary exception to allow Ho Bee Land due diligence access
- No certainty either proposal will result in a transaction
- Dividend adjustments apply to both proposals' offered prices
Background on Competing Proposals
AVJennings Limited (ASX: AVJ), a key player in Australian property development, is currently navigating a complex acquisition landscape. On 15 January 2025, the company disclosed an unsolicited, conditional, and non-binding proposal from Singapore-based Ho Bee Land Limited to acquire all remaining shares it does not already own at $0.70 per share. This offer comes amid an existing exclusivity agreement with AVID Property Group, which had previously tabled a $0.673 per share proposal in late November 2024.
Board's Strategic Response
Despite the exclusivity arrangements with AVID, AVJennings’ board has invoked a fiduciary exception to the 'no talk' and 'no due diligence' clauses. This decision allows Ho Bee Land to access due diligence materials, subject to confidentiality agreements. The move signals the board’s commitment to exploring all viable options to maximise shareholder value, while maintaining procedural fairness. AVID retains due diligence access until the exclusivity period ends on 31 January 2025.
Financial and Legal Nuances
Both proposals include adjustments for dividends declared or paid after mid-January 2025, which could affect the final cash consideration. Ho Bee Land’s offer is reduced by any dividends up to $0.06 per share, while AVID’s proposal accounts for a fully franked special dividend. These nuances underscore the importance of timing and shareholder returns in the ongoing negotiations.
Market Implications and Uncertainties
The competing bids place AVJennings at a strategic crossroads, with potential implications for its share price and future corporate direction. However, the company cautions shareholders that there is no certainty either proposal will culminate in a transaction. Investors will be watching closely as the exclusivity period nears its end and due diligence progresses, seeking clarity on which offer, if any, will prevail.
Looking Ahead
With Barrenjoey and Allens advising AVJennings, the company is well-positioned to navigate this pivotal phase. The board’s openness to competing proposals reflects a dynamic M&A environment in the Australian real estate sector, where strategic acquisitions can reshape market positioning. Stakeholders should anticipate further updates as AVJennings balances fiduciary duties with shareholder interests.
Bottom Line?
AVJennings’ willingness to entertain multiple bids sets the stage for a potentially transformative deal, but uncertainty remains high.
Questions in the middle?
- Will Ho Bee Land’s higher per-share offer sway AVJennings’ board over AVID’s proposal?
- How will dividend adjustments impact the final valuation for shareholders?
- Could a bidding war emerge before the exclusivity period expires on January 31?
