Published: 27 February 2005
The former Hibernian Friendly Society (NSW) Ltd in Sydney, renamed Aevum Ltd and listed on the ASX last November, has made its first post-listing acquisition but also has a takeover bid from Primelife Corp Ltd of Melbourne to contend with.
The Primelife bid looks very underpriced on current numbers, but Primelife has entered a development joint venture aimed at major growth.
Aevum said on Friday it had settled its $A21 million purchase of the 113-unit Castleridge Retirement Resort at Castle Hill, Sydney, which was bought using existing reserves.
Castleridge operates on a resident-funded loan-lease business model similar to Aevum’s existing Cardinal Freeman & Lourdes retirement villages in Sydney.
The company is forecasting $A4.2 million profit & an unfranked A5c/share dividend for the June year.
Primelife’s scrip bid – 8.4921 Primelife shares:10 Aevum shares – opened in January and closes on Wednesday 9 March, and it’s value has steadily been declining.
When it opened, Primelife said its bid was at “an attractive premium” â€“ at an effective $A1.30, it represented a 44% premium over Aevum’s IPO price of A90c. trouble with that is, Aevum opened on 18 November at $A1.52, an even bigger premium.
Primelife said on 16 February its bid was worth $A1.03/Aevum share based on 10 February prices of $A1.21 for Primelife & $A1.59 for Aevum. By Friday, 25 February, the bid’s value had fallen to A91c, based on Primelife at $A1.07, Aevum at $A1.46.
Primelife made a $A2.1 million loss in the December half on revenue up 21% to $A54.4 million, down from an $A16.6 million loss in the December 2003 half. It raised $A140 million in capital during the half and entered a development joint venture with developer Multiplex Ltd and investment group Babcock & Brown, its financial advisor.
While Primelife would have done its immediate chances of success no good by reporting a loss, its joint venture has set up a 25-project development pipeline.