Babcock & Brown Communities Transaction Progress

The major changes to the proposal are:

�� A reduced price for the acquisition from Babcock & Brown of their 12.5% stake in BBC from 58 cents to 29 cents per stapled security
�� A reduced price for the $170 million placement from 68 cents to 60 cents per share (283.3 million stapled securities, subject to a successful security holder vote at an Extraordinary General Meeting (the “Vote”))
�� A further cash injection by Lend Lease of $25 million in BBC through the issue of 100 million convertible notes of 25 cents each thereby increasing the total injection to $195 million
�� Lend Lease’s overall cash outlay remains the same
�� The BBC management rights will be acquired from Babcock & Brown for $17.5 million, with $5 million to be paid immediately and the second instalment of $12.5 million, to be paid following a successful Vote
�� Stage 1 of the transaction, which involves Lend Lease increasing its holding to 17.8%, will now be conditional on a successful Vote (unless Lend Lease decides to waive this condition)
�� Lend Lease’s stake in BBC, once approved by security holders, will be 43.2%

The transaction is progressing with BBC agreeing to acquire a number of Retirement by Design villages for $133.4 million, subject to security holder approval. The necessary consents required under BBC’s finance arrangements have also been obtained for the revised proposal on terms which are acceptable to Lend Lease. One of the conditions to this consent is that the management rights are novated to Lend Lease.

Lend Lease Group CEO, Greg Clarke said: “The Babcock & Brown Communities transaction is progressing well and we look forward to their securityholder vote in December. As previously stated, we believe the retirement sector provides a number of strategic benefits for Lend Lease and this transaction provides us with management of, and investment in, one of Australia’s leading pure play operators.”

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of