Aevum Rejects Stockland

Australian retirement village operator Aevum (ASX:AVE) have rejected a $266 million takeover bid of diversified property group, Stockland (ASX:SGP). SGP is AVE's biggest shareholder (15.7 percent holdings) had offered $1.50 per share to which Aevum said that valuation "significantly undervalues" the company.

Matthew Quinn, chief executive officer of Stockland, had filed a statement after the rejected takeover offer saying: " Joining the two businesses, and utilizing our position as Australia’s largest diversified property group, would provide greater diversity and scale to the benefit of Aevum’s stakeholders including employees and residents".

Aevum's Retirement Village Business

Aevum has six retirement villages in Sydney, including properties in the suburbs of Ashfield, Killara, Cromer and Castle Hill. Aevum said the takeover offer did not reflect the strategic value of its businesses, provided that it was one of the largest pure retirement living companies with a significant presence in NSW.

Stockland's Finances

Stockland, has a current market value of $9.1 billion, has stated that the acquisition would be fully funded from existing cash reserves and debt facilities. The acquisition would increase pro-forma net gearing to an estimated 20 per cent from 18 per cent. The takeover is a part of it's "3-R Strategy" growing its residential communities, retirement living and retail portfolios as it views retirement living as a "megatrend". Managing director Matthew Quinn has stated that "Retirement living is one of our key strategic growth platforms, leveraging our experience in residential development and appealing to Australia’s growing retirement-age population."