Eureka to sell two SA villages after seeing off Aspen takeover bid

The move comes as the over-55s rental community operator eyes more acquisitions and developments.

Aerial view of Eureka’s seniors accommodation complex in Whyalla Norrie. Picture: Supplied by Colliers

Listed seniors rental accommodation provider Eureka has listed for sale two of its villages in regional South Australia after fending off takeover attempts from rival Aspen.

The sell-off includes a 58-unit site in Mount Gambier, in the state’s South-East, and a 57-unit complex in Whyalla Norrie on the Eyre Peninsula.

Colliers’ Chris O’Driscoll and Justin Hazell have been appointed to sell the properties.

Eureka executive chairman Murray Boyte said the decision to divest resulted from an ongoing review of its portfolio.

“Asset recycling by Eureka is not new and is an important element in the company’s asset management plan,” he said.

“Assets will be recycled where they are non-core or cease to meet target performance levels.”

The company’s board in May rejected Aspen’s latest scrip offer – which valued Eureka’s shares at 49c – pointing to an independent expert’s report that valued the company’s shares at 52c-55c. The company’s shares are currently trading at around 54c, valuing the company at around $163m.

The sell-off includes a 58-unit site in Mount Gambier and a 57-unit on the Eyre Peninsula. Picture: Supplied by Colliers

While Aspen’s bid to create a $500m affordable housing company failed, it emerged with a 36 per cent stake in Gold Coast-based Eureka – the only pure-play over-55s rental community operator on the ASX.

Following the expiry of Aspen’s offer on May 29, the Sydney-based lifestyle, holiday parks and residential housing group said it would seek board representation in a bid to “help improve performance and returns for shareholders”.

“Aspen’s view on the initial steps is through board renewal and recruitment of a high-quality CEO,” the Sydney-based company told the ASX on May 29.

Mr Boyte would not comment on how talks were progressing with Aspen, but said the company “welcomes feedback from all shareholders on the composition of the board”.

“The company periodically reviews the structure of the board to ensure that it has the appropriate balance of skills and experience required for strong governance.”

Mr Boyte added that since the expiry of the takeover offer, the board had commenced “various initiatives to create sustainable value for its shareholders”.

“This will be delivered through further expansion of its core business, through active management of existing assets, the acquisition of additional villages and units, the realisation of development opportunities and the prioritisation of the appointment of a new CEO,” he said.

“These strategic initiatives will be propelled by favourable industry dynamics, including the population growth of the 75-85 age cohort, the increasing trend away from home ownership among older Australians and a growing proportion of underfunded retirees.”

Eureka’s previous chief executive Cameron Taylor resigned in July 2023, leaving Mr Boyte to step in as acting CEO.

As part of its “acquisition and development growth strategy” Eureka acquired a portfolio of six seniors rental villages in Western Australia for $44m from Ingenia Communities last November.

Mr Boyte said prior to Aspen’s approach, the company had also completed 14 individual unit acquisitions, purchased land in Gladstone for a greenfield development and completed the expansion of its Brassall Village in Ipswich, which had since been fully leased.

The group’s portfolio now comprises more than 2880 units across 52 villages.

The sale of the two regional SA sites would leave it with three villages in South Australia, at Christie Downs, Elizabeth Vale and Hackham.

Expressions of interest in the two South Australian villages close on July 25.