The Avjennings Ltd (ASX: AVJ) share price has gone up 7% after agreeing a takeover deal.
This business is a relatively large residential property development company. It builds communities and homes across Australia.
Takeover agreed
The company said that it has entered into a scheme implementation deed (an agreed takeover deal) with an investment vehicle of Proprium Capital Partners and AVID property group.
The agreed deal is for $0.655 cash per AVJennings share.
Under the takeover deal, AVJennings shareholders are getting shares at a 98.5% premium to the closing AVJennings share price on 27 November 2024 of $0.33, which was the day before the takeover approach was first announced.
The ASX share also said that it’s permitted to pay a fully franked special dividend on or before the takeover record date, allowing shareholders to receive an additional value of up to $0.072 per share of franking credits. The offer will be reduced by the cash amount of any special dividend paid.
No binding offer from Ho Bee Land
The company noted the previous proposal from Ho Bee Land for $0.70 cash per share, but no binding offer has been received and discussions with Ho Bee Land have been terminated.
Due to no other offer being provided, the ASX share’s directors decided to formally agree the takeover from the AVID offer.
Directors recommend the deal
AVJennings said its board of directors have unanimously recommended shareholders vote in favour of the deal in the absence of a superior offer and subject to an independent expert concluding the offer is in the best interests of shareholders.
SC Global Developments holds 54% of AVJennings and has confirmed it intends to vote for the takeover deal.
Final thoughts on the AVJennings share price
The business is virtually trading at the offer price now, so there seems to be little upside to buying shares today. If I were a shareholder I’d be happy to sell today and put the money into something similar, such as Brickworks Ltd (ASX: BKW) shares which is a great value, growing building products business.
