Brookfield is expected to gain further insight by the end of the week as to what sort of price it can expect for its retirement village operator Aveo when bids are due.
The main names that feature as possible contenders are Charter Hall, Scape, Oxford Properties, AustralianSuper and GIC.
However, it is understood at least some of those parties are still searching for capital, are not interested in paying the asking price of over $3bn or may be keen to buy just part of the business.
Private equity firms were known to have been around the hoop last year, but are understood to have fallen away.
It’s possible that AustralianSuper and GIC join forces with Charter Hall or Scape, while there are mixed messages in the market as to whether Oxford Properties is still around the hoop.
Potentially helping the sale process are expectations of future rate cuts this year that could offer some stimulus to the housing market. Aveo is on offer through Barrenjoey and Morgan Stanley and hit the market last year.
Brookfield bought the then-listed Aveo (previously known as FKP) in 2019 for $1.3bn, or $2bn including debt.
Established in 1970, Aveo has 67 retirement facilities along the eastern seaboard. It has a deferred management fee model where income is back-ended, but also offers an upfront payment or bond payment option.
Aveo has 4 per cent market share, ahead of Lendlease with 1.9 per cent and Bolton Clarke with 1 per cent, according to IBISWorld.
The Reject Shop
Dollarama’s buyout proposal for The Reject Shop that was announced on Thursday has been a long time coming.
It is understood Raphael Geminder’s Kin Group, which owns 20.8 per cent of the Australian listed discount retailer, was keen to divest for years, but the global pandemic put a stop to his plan.
The bid for the $118m company was $6.68 per share, a 112 per cent premium to the closing price of $3.15 and equating to close to $250m, and it has been recommended by the company.
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Local bond market on the agenda
A view in the market is that the cost of debt in Australia is a handbrake on productivity, and some point out that the major banks have not grown their lending business since 2010.
A long and winding Country Road ahead
Sources say former management had recently been working with private equity to make a buyout offer for the retail business.
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