Warburg lifts Ingenia bid as takeover value tops $3.2b
Warburg Pincus has raised its takeover proposal for Ingenia Communities Group to $5.60 per stapled security, topping AVID Property Group’s matching offer by 10 cents.
The US private equity firm has submitted its fourth revised proposal, comprising $5.55 cash per security plus a permitted distribution of up to 5 cents for the half-year ending December 31.
The offer implies an equity valuation of about $2.3 billion on a fully diluted basis and represents a 50.4 per cent premium to Ingenia’s $3.69 closing price on August 28, before Warburg’s initial proposal was announced.
The $3.2b enterprise valuation includes the group’s debt and other balance-sheet adjustments.
AVID lifted its proposal to $5.45 cash per security earlier this week, also allowing securityholders to retain the permitted distribution, taking its potential total consideration to $5.50.
Warburg’s latest proposal is backed by proposed Australian co-investors Discovery Parks and LDR Capital, with key commercial terms now agreed.
Paul Lederer, Discovery backed
Under the proposed structure, Discovery Parks would acquire Ingenia’s holiday parks business, while LDR Capital would take its gardens business (continues below).
Warburg said it had completed phase one due diligence and a material amount of phase two investigations, positioning the consortium to move directly to remaining confirmatory work and negotiations over binding transaction documents.
The latest proposal also seeks to distinguish itself on regulatory and execution risk, with Warburg arguing the proposed Discovery Parks combination would involve less overlap with Ingenia’s holiday parks than AVID’s proposed structure involving Tasman Holiday Parks.
The proposal remains conditional and non-binding, requiring due diligence, binding transaction documentation and regulatory approvals, including from the Foreign Investment Review Board and Australian Competition and Consumer Commission.
Ingenia’s board is considering the latest offer.
The company has yet to establish that the proposal is superior to its existing arrangements with AVID and its separate scheme implementation agreement to buy Peet for c$1b – a deal which would be off the table if a deal was settled with it or Warburg.
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