Aussie home builder AVJennings latest to fall into offshore hands amid cost pressures

The home builder, which is run by former Wallaby Phil Kearns, is set to be folded into a global investor’s operations after a poor share market run.

AVJennings has homes on the market at Riverton from $685,500. Picture: Supplied

High-profile home builder and developer AVJennings will be taken over by global private equity real estate group Proprium Capital Partners and its local offshoot as the home building industry is hit by a wave of consolidation.

The $369m take over bid is the latest chapter in a run of deal making that has seen offshore companies, led by a series of Japanese heavyweights, swoop on stakes in home builders, including national company Metricon and NSW-based NEX Building Group.

The companies are betting on a recovery in the home building market after it was battered by higher interest rates, low consumer confidence after a series of builders collapsed, supply chain problems which drove a dramatic jump in input costs, and difficulties securing labour.

Proprium Capital Partners and its local housing business Avid won the takeover battle after interest from Singaporean developer Ho Bee Land faded away. AVJennings was vulnerable, as it had been a sharemarket underperformer before the takeover battle kicked off last year. AVJennings fell to a $1m profit in 2024 after writing off the costs associated with a soured Queensland land play.

Shareholders including farmer and activist investor Lynn Brazil, who had a stake of about 6 per cent, were also unhappy about the company undertaking a deeply discounted $30m capital raising in 2023 and were pushing for a board shake up.

Proprium and Avid arrived with a $377m takeover bid that was pitched at just over double AVJennings’s trading price of 33c, as the board contest was coming to a head in late November.

They have trimmed their bid after undertaking due diligence with AVJennings, which is run by former Wallabies skipper Phil Kearns, entering a scheme implementation deed at 65.5c cash per share. This is still a 98.5 per cent premium to AVJennings’ depressed share price before the takeover battle kicked off.

The company will also pay a fully franked special dividend before the scheme, allowing shareholders to receive an additional value of up to 7.2c per share in franking credits.

Ho Bee had made an indicative takeover proposal at 70c per share, but that move did not go ahead and AVJennings terminated talks with the Singaporean company.

AVJennings said Proprium’s offer would give shareholders certainty of value at a substantial premium to its undisturbed trading levels, historical trading benchmarks and other Australian real estate takeovers.

Singapore’s SC Global Developments Pte Ltd, which has a 54.02 per cent stake, has confirmed to AVJennings that it would vote for the Avid plan unless a superior proposal emerges.

AVJennings appointed Kroll Australia as independent expert to prepare a report on the scheme.