Student accommodation provider Scape may have entered exclusive talks to buy retirement village operator Aveo for over $3bn, but now it starts the job of finalising exactly who it owns the business with should it finalise a transaction.
Bids came in last month, as earlier reported, after DataRoom revealed the business was being placed on the market last year.
The main names that featured as possible contenders were Charter Hall, Scape, Oxford Properties, AustralianSuper and GIC.
Charter Hall had earlier left the race, in the final stages, GIC and Scape remained in the mix.
Scape, advised by Deutsche and Macquarie Capital, is believed to remain in talks to finalise capital partnerships.
The talks remain fluid, but it is understood that Scape has strong support for a transaction with existing and new investors.
A question is exactly what party comes forward, in a phase of negotiations said to be highly sensitive.
Private equity firms were known to have been around the hoop last year, but are understood to have fallen away.
Aveo has been on offer through Barrenjoey and Morgan Stanley, as first reported by this column.
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.
Price expectations were set high after Stockland in 2022 offloaded its retirement living business for about $1bn to private equity firm EQT, which fended off competition from other buyout funds including Blackstone and Kohlberg Kravis Roberts.
EQT has the New Zealand retirement business Metlifecare, which it purchased for $NZ1.3bn in 2020 and has also been speculated as being for sale.
More to come
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