Stockland Beds Down Assets
Sydney Morning Herald
Tuesday October 14, 2008
STOCKLAND became the latest property player to wade into retirement homes with its purchase of a strategic 14.4 per cent stake in Aevum from Babcock & Brown. It paid $1.50 a share, or $26.9 million.
The price was a 17 per cent discount on what Babcock had paid for the asset, indicating the investment bank was a keen seller. It is also selling Babcock & Brown Communities in a preferred deal with Lend Lease. Stockland will use debt to fund the deal, leaving the $300 million it raised last week on its balance sheet for other transactions. An Austock analyst, Rohan Sundram, said the deal was positive for Stockland given Aevum's scale in NSW, and would complement Stockland's exposure to retirement homes in Victoria and Queensland, where it has 3445 dwellings in 20 villages, with scope to develop 3630 more. Aevum is the largest for-profit operator of retirement homes in NSW, with 2100 units in Sydney, the Central Coast, Port Macquarie and the Southern Highlands. Stockland's managing director, Matthew Quinn, said the purchase was consistent with the company's plan to increase its presence in the sector. "We look forward to having a constructive dialogue with the Aevum board as the company's largest shareholder," he said, but declined to say whether Stockland would increase its stake. In a twist yesterday, the former head of Stockland's commercial and industrial property arm, Steve Mann, took up the role of managing director at Aevum. But the Stockland deal was overshadowed when its rival FKP requested a trading halt until Wednesday morning, "pending the completion of negotiations with several parties in relation to potential significant transactions". FKP did not return calls yesterday, leaving investors with many theories including a possible three-way asset sell-off its retirement business to Lend Lease or Stockland and some of its development businesses to a third party, possibly Mirvac.
© 2008 Sydney Morning Herald
