Australia-listed land-lease community operator Ingenia Communities Group has rejected an improved AUD2.06bn (€1.47bn) cash takeover proposal from private equity firm Warburg Pincus, saying the offer continues to undervalue the business, according to a report by Reuters.
The latest approach, submitted on 14 September, would see Warburg Pincus pay AUD5.05 per Ingenia share in cash. The proposal represents an increase of almost 6.3% on the private equity firm’s initial AUD1.94bn bid made on 30 August, as Warburg Pincus seeks to secure control of the Australian residential communities operator.
Ingenia’s board said the revised proposal remained insufficient and was not in the best interests of shareholders. It also retained a condition requiring Ingenia to abandon its proposed AUD711m acquisition of master-planned communities developer Peet.
The Peet transaction is viewed by Ingenia as an important part of its long-term growth strategy, with the company maintaining that its planned expansion provides a strong platform for future development.
Warburg Pincus, meanwhile, argued that its revised proposal offered Ingenia shareholders an attractive all-cash alternative to the Peet acquisition and provided a basis for further negotiations and due diligence.
“Warburg Pincus is disappointed by Ingenia’s decision not to engage on our materially improved proposal,” the private equity firm said.
The latest offer represented a 16.9% premium to Ingenia’s share price before the bid process began. Ingenia shares rose as much as 2.6% to A$4.43 on Monday, their highest level since mid-August.
Citi analysts said feedback from investors suggested there was scope for a higher cash offer, noting that an all-cash bid in the AUD5.25 to AUD5.50 range could prove compelling in the near term given uncertainty surrounding Australia’s residential property market.
Ingenia said its board remained willing to assess proposals that it considered to represent compelling value, while reiterating its confidence in the company’s existing strategy and growth prospects.
