Land LeaseClare BurnettMon 26 Oct 26
Warburg Pincus Frozen Out as Rival Circles $2.2bn Ingenia Deal
US private equity firm Warburg Pincus is facing competition after several failed bids for lifestyle communities specialist Ingenia Communities Group.
Avid Property Group has stepped up as a suitor for the group after three failed attempts by Warburg Pincus to take over the ASX-listed over-55s community and holiday park developer and operator.
Avid has entered the fight with backing from a “global sovereign wealth fund”—owner Proprium Capital Partners is partnered with Abu Dhabi’s sovereign wealth fund, Mubadala Investment—and a global financial sponsor that has been tipped in media reports as Brookfield.
Warburg Pincus has been dogged in its fight to take over the Sydney-based company which has a market capitalisation of $1.94 billion.
The first attempt was in early September when the private equity firm offered $4.75 per security, valuing Ingenia at $1.94 billion.
Ingenia knocked back that unsolicited offer, which rested on Ingenia scrapping its proposed $900-million acquisition of residential developer Peet, announced earlier this year.
Ingenia told the ASX that the offer “substantially undervalued” the company. It also said that its proposed acquisition of Perth-based Peet was “an important component of Ingenia’s strategy”.
Warburg Pincus was not discouraged. Two weeks later the US firm raised its bid to $5.05, which valued the company at $2.06 billion.
They were again rebuffed, and raised it again to $5.25 and valuing the company at around $2.14 billion as at October 20.
Avid joins battle to win Ingenia
Avid has now swooped in and bested that latest offer, making an unsolicited, non-binding indicative proposal of $5.35 per security, which values the company at $2.18 billion.
The October 26 offer is conditional upon the unanimous support of the Ingenia board, satisfactory due diligence and regulatory approvals from the Foreign Investment Review Board and other relevant bodies.
Avid said that it intended to transfer Ingenia’s holiday parks business to Tasman Holiday Parks in a restructure of the business.
But Avid’s offer also requires that Ingenia cancel the proposed Peet acquisition.
Avid Property group chief executive Anthony Demiris said Ingenia had built a high-quality business with an attractive portfolio.
“With backing from our investment partners, we believe this proposal delivers compelling value for Ingenia securityholders and a quality future for the business,” Demiris said.
Ingenia reacts to latest takeover bid
Ingenia’s board seems to be more amenable to the latest offer. After “careful consideration” of Avid’s offer, the Ingenia board entered a process deed with Avid and is granting the company a six-week period of “soft exclusivity”.
As a result of the deal, it has blocked out Warburg Pincus from accessing its data room.
But Ingenia warned that there was “no certainty” that the Avid indicative proposal would lead to a binding proposal.
The latest move brought Ingenia’s share price up again which was on October 26 around $5 per share—its highest since January. It comes after strong results for its latest financial year.
Warburg Pincus wants to break into the Australian market with its Kiō Investment Management partnership. But taking a conservative approach with investments in solid markets such as logistics has reportedly underwhelmed the market.
Avid, meanwhile, has had a strong year securing approval for two land lease communities that will add 600 homes to its pipeline in South-East Queensland. It did, however, pull out of a 1900-home project in South Australia earlier this year.
The group is no stranger to ASX acquisitions. Avid acquired AV Jennings last year, bringing the developer’s footprint to 69 projects totalling 16,000 land blocks and a gross revenue pipeline of $7 billion, and removing residential developer AV Jennings from the ASX.
