Avid Property group increases offer for takeover of Gold Coast developer Villa World to $293.5m

A takeover of the Gold Coast’s largest listed developer looks increasingly likely, with its directors backing a buyout proposal after the buyer upped its offer to $293.5 million.

A bird's eye view of Villa World's Killara in Victoria.

A TAKEOVER of the Gold Coast’s largest listed developer looks increasingly likely, with Villa World’s directors backing a buyout proposal by Avid Property Group after it upped its offer by $13.5 million to $293.5 million.

The Australian arm of the international fund manager launched a bid for the Gold Coast developer on March 14, offering $2.231 per share to acquire all 125 million securities in Broadbeach-based Villa World.

Villa World directors did not give their blessing of the deal at that price, and the market responded by driving shares price from $1.99 to $2.20 after the deal was announced.

This morning the company announced Avid had increased its non-binding offer to $2.3451 per share.

Craig Treasure, Villa World, CEO/Managing Director.

HO BEE LIFTS STAKE IN VILLA WORLD AFTER AVID BID

Villa World, which reported a profit of $17.6 million for the half year, said the proposal was by way of a scheme of arrangement and directors intend to “unanimously recommend” it.

Villa World has granted Avid exclusive due diligence to progress its revised proposal.

The company said the offer represented a 17.8 per cent premium to the Villa World closing share price of $1.99 on March 14, before the offer was announced.

“The board of directors of Villa World has, together with its advisers, carefully reviewed the revised proposal,” the company announced through the ASX.

“The board considers that the revised proposal provides shareholders with certainty of value and the opportunity to realise a meaningful premium to the market value of their shares.

“Accordingly, the directors of Villa World intend to unanimously recommend that shareholders vote in favour of the revised proposal (at the increased offer price of $2.3451 per share).”

The company emphasised the deal was non-binding and subject to a suite of conditions.

Villa World's Arundel Residence's streetscape.

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Avid will have until mid June to conduct its due diligence and facilitate a binding proposal.

Villa World shareholders do not need to take any action in relation to the revised proposal at this stage.

“The Villa World Board will keep the market informed of any material developments in accordance with its continuous disclosure requirements,” the company said.

Macquarie Capital (Australia) Limited is acting as financial adviser and Allens as legal adviser to Villa World.