2102 in review

Aveo and RVG
In January we reported that Aveo parent FKP shares jumped 42% from 46 cents to 65 cents over Christmas based on rumours that a large Chinese conglomerate was negotiating to buy Aveo after it acquired the sole management rights from Macquarie Capital Group for the RVG villages. But the Chinese didn’t arrive. In August FKP CEO, Peter Brown, announced his retirement and as yet a replacement has not been found. Contender Justin Laboo, who had been running Aveo for five years also quietly resigned at the beginning of September. By then the board had commissioned Goldman Sachs to review opportunities to separate Aveo from FKP to separately engineer a public listing to release its cash value. The Goldman Sachs report indicated it would take 12 to 24 months to achieve. FKP then issued 1 billion heavily discounted new securities at 20 cents to raise $208 million. Their share price then dropped from 38 cents to 28 cents. By end of September the shares were 24 cents, valuing the company at $277 million compared to its Net Present Value of $1.04 billion. The board last month announced they wanted a solution within three to six months – regarded as almost impossible given the complexities around tax in particular. All of their villages have recently been valued – perhaps in preparation. Today the share price is 20 cents compared to 65 cents in January and $6.40 in January 2008 [pre-GFC].
Peak bodies
The on again/off again merger of the largely not-for-profit peak body ACSA and largely private aged care peak body ACAA finally died around 20 February. On 30 March a new peak body was announced called Leading Aged Services Australia (LASA), led by Queenslanders and Victorians who expressed frustration with the perceived missed opportunity of combining the private and the not for profit sector together as one voice, plus identifying a need for one body that represented all aged care and accommodation services – including home care etc - given the direction of government. The new LASA members gave three months notice of their departure from ACSA membership. Both LASA and ACSA have now set up competing administrations, complete with CEOs. Both also claim to be receiving defecting members from the other organization. Interestingly both had successful national conferences just one month apart, each with approximately 700 attendees, indicating the sector is unsure which way to jump.
CEOs
Major changes through the year with CEOs:
• Ross Smith retires in February as CEO of RSL Care (QLD) to be replaced by outsider Stan Macionis
• Gerard Mansour appointed inaugural CEO of LASA Australia in May, to regrettably resign in November for personal family reasons
• Peter Brown retires as CEO of FKP in August after 10 years
• Matthew Quinn retires as CEO of Stockland in August after 11 years
• Paul Walsh in August moves up from CEO of Lend Lease Retirement to be Chief Financial Officer of Lend Lease Construction
• Michael Eggington in August joins Lend Lease Retirement as CEO after a sabbatical from Stockland as General Manager – Retirement
• Rod Young in August officially separates from ACAA as CEO and joins Hynes Lawyers
• Justin Laboo in September retires from CEO of Aveo

There is much more – but we will review next week.