ARV - Arvida Retirement Villages

[Baa_Baa]

What has changed in seventh months? The Directors panned the buyout then, at exactly the same buyout price they now apparently support? https://businessdesk.co.nz/markets/a...ition-proposal

[buy_high_sell_lo]

The full story is in this book.Most public libraries have it.

The Billion Dollar Bonfire

Author Chris Lee

The collapse of South Canterbury Finance (SCF) is one of the biggest New Zealand stories of the last decade. The sweep of events, from Timaru to the Beehive, includes some of the most revealing moments on issues critical to this country - from poor governance and systemic uses in the finance sector, through to the structural risks this exposed and the costs it ultimately presented to all New Zealander's

Thank you for this book recommendation. I have enjoyed reading this over the weekend.

[777]

Premium from the NZ Herald

https://www.nzherald.co.nz/business/...ACLYH7HOXOHDA/

Stonepeak’s $2b Arvida Group takeover: Analysts on deal, what happens next?
Anne Gibson
By Anne Gibson
26 Jul, 2024 12:44 PM

Shareholders in takeover target retirement giant Arvida Group by New York-headquartered private equity business Stonepeak are due to get an independent adviser’s report around the end of September and vote on the scheme before Christmas.

On Monday, Arvida’s board announced it had recommended shareholders accept the $1.70/share offer, which is 65% above the $1.03 the stock was trading at pre-offer on Friday, July 19.

The offer was reported as not surprising by Harbour Asset Management’s Shane Solly, who said high New Zealand interest rates had particularly hurt the listed retirement sector and driven share prices down. That spelt excellent buying opportunities for investors.

Grant Samuel is due to issue its independent adviser’s report in the next few weeks, although no exact date has been announced.

Analysts wrote positively about the offer, one saying the premium Stonepeak is paying was above historical takeover averages in the last decade.


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Aaron Ibbotson and Benjamin Crozier of Forsyth Barr said it would be in this year’s third-quarter end that shareholders would get further information from Arvida and the independent adviser’s report, “including reasons why the independent directors have voted in favour”.

By this year’s fourth quarter, shareholders would vote on the proposal. For it to pass, 75% of votes on more than half the shares must back it.

“Arvida has indicated after feedback from shareholders it is ‘very confident of shareholder support for the scheme’,” the Forbar analysts wrote in their report this week. Forbar is advising Arvida and earns fees for that, their report also noted.


The aged care sector had performed well since the Reserve Bank signalled a more dovish stance earlier in July.

“However this was from, in our view, very depressed levels. We still see room for strong performance in the sector and believe a reduced RBNZ OCR, a macro backdrop improving from rock bottom and demonstrating improved cash conversion of earnings could act as near-term catalysts. Specifically, we see an interest rate cut in August as a clear possibility and one or more before year end as highly likely,” the Forbar analysts said.

Comparison to Metlifecare takeover
Jarden analysts Arie Deker and Vishal Bhula compared Stonepeak’s offer to EQT’s takeover of Metlifecare in 2020.

Like the Metlifecare deal, there was an element of opportunistic timing involved in Stonepeak’s offer, they noted.


“While there are clear differences with the sector’s strongest performer, Summerset Group, we see Arvida as better positioned than Oceania Healthcare on development readiness and portfolio composition.

“With a long tail of smaller, less integrated sites lacking continuum of care, we would see Arvida as likely to take a more pragmatic approach to value realisation on non-core assets under private ownership, particularly against growth uses for the capital,” the Jarden analysts wrote.

Arvida had more limited capacity for growth than its peers but “under private ownership, we expect it would be less likely to share the market’s aversion to using equity to fund organic growth where returns are supportive”.

‘Above historical average’ - UBS
UBS analyst Bianco Fledderus released an analysis saying the offer was well above the 36% historical average premium for successful full takeovers in New Zealand in the past 10 years.

Even more notably, Stonepeak’s offer was well above that when EQT took over one of Arvida’s competitors in 2020: EQT paid a 15% premium for those Metlifecare shares back then, she noted.

Jeremy Nicoll, Arvida Group chief executive, wrote to shareholders about the deal on July 24. Photo / Dean Purcell
Jeremy Nicoll, Arvida Group chief executive, wrote to shareholders about the deal on July 24. Photo / Dean Purcell

Fledderus also outlined the steps possible for the deal to go ahead. She indicated possible timeframes.

These dates were only possible projections, she stressed, based on a broad indication of what may occur at or around these times.

July 20: Execution of the agreement between Arvida’s board and Stonepeak;
July 22: Announcement to NZX that the takeover agreement had been entered into;
August 9: Stonepeak to submit its application to the Overseas Investment Office;
August 13: Arvida to submit its vendor information to that same office;
August 23 Comments on scheme booklet provided by Stonepeak to Arvida;
August 30: Final draft scheme booklet provided to Stonepeak for review;
Final draft scheme booklet including independent adviser’s report provided to Takeovers Panel for review;
Final draft scheme booklet excluding independent adviser’s report provided to Stonepeak;
Late August: Scheme booklet including independent adviser’s report approved by Takeovers Panel;
Takeovers Panel due to then issue a letter of intention;
September 1: Application for initial orders filed by Arvida with the court;
Early September: First court date as soon as possible, subject to availability;
Early November: Court may around this time grant initial orders if it sees fit;
November 14: Scheme booklet sent to shareholders, including independent adviser’s report;
December 3: Time and date for determining eligibility to vote at scheme meeting;
Early December: Arvida applies to Takeovers Panel for a no-objection statement;
December: Takeovers Panel could issue a no-objection statement around this time;
January 15, 2025: Shares in Arvida trading on the stock exchange suspended;
Early February 2025: Implementation date for the deal.
Nick Mar, a Macquarie analyst, noted Arvida’s announcement last December of interest from a buyer.

Shares were trading higher then.

“The takeover offer announced is the same bidder at the same price, and it appears Arvida will have been working on this prior to the May announcement of the value recognition programme. The premium to the share price is however larger now at around 65% above last close and 82% above volume-weighted average price vs in September 23, where it was around a 35% premium to where ARV was trading,” Mar noted.


Macquarie has an “outperform” on Arvida, Mar saying he viewed the sector as materially undervalued.

The key catalyst to restoring confidence was a broad housing recovery allowing for improved sales, reduced stock, lower debt and the ability to resume build rate growth.

“Sentiment in the sector has shifted in the last month with a more dovish RBNZ and expectations of mortgage rate cuts sooner than later, while the takeover price more quickly recognises this upside,” Mar noted.

Shares are trading around $1.62, giving a market cap of $1.1 billion.

[flyinglizard]

just love to see the independent valuation that they paid for, checking those inputs. Feel that the boards are working for the 18% institutional shareholders, totally ignored the rest.

[bottomfeeder]

I sold out my total shareholding at $1.63. Just felt that holding on for the extra for several months, may not be worth the wait and the albeit small risk. Remember what happened with Metlife care. Any excuse to bring the price down. Maybe the uncertainty and the stock market correction may give the buyers a chance to pause. I will buy back if the price goes down.

Christmas is coming and I like the gifts that keep on giving (as metlifecare did). If not I made decent money. Squeezing out the last dollar can sometimes hurt you in the end. I may be wrong, by which time I may be fully invested in another correction share by then so no time to be sorry.

[thebusinessman]

I sold out my total shareholding at $1.63. Just felt that holding on for the extra for several months, may not be worth the wait and the albeit small risk.

I've joined you. Yes, there could be more negotiations for a higher price or any number of bad things also. I've been taking opportunities presented to me in this market to reduce exposure and this and ERD have been my two action points. Still have plenty in the game, but feel comfortable having a little profit out too.

[thedrunkfish]

Yup, i'm out at $1.63 for the same reasons.

[Scroogeus]

So, is the overall feeling on ARV

A it will go through
B May be at a higher price
C sell now , maybe 7c less and brokers fee.

I am a holder and trying to look at the options, opinions I accept is simply that, but interested in your comments, thanks