Recent dives in the stock-market values of major private village operators have played into the hands of a cashed-up Lend Lease. Aveo parent FKP was the first to be attacked, with an incursion on Babcock & Brown Communities (Primelife and Fini villages) following soon after. And there will be more to come Lend Lease CEO Greg Clark stating he has at least five takeover targets in sight, with his eye particularly on the retirement village sector.
Last Friday, Lend Lease offered $5.00 in cash and shares for FKP when it was trading at $3.80 a premium of 32 percent. Yesterday, it bought 40 million shares or six percent of Babcock & Brown Communities for $18 million. Austock Securities responded by saying BBC would be too hard to take over due to the 25-year management agreement it has with its now infamous godparent, Babcock & Brown. But it viewed Aevum as a good prospect for its 22 villages in city as well as regional locations in NSW, and mid-priced ILUs. Becton was also listed as a target for its high quality villages in Melbournes inner city. Based on assets, Austock valued Aevum at $3.78 while its shares were trading at $1.98, and BBC at $0.72 with its shares at just $0.45. ABN Amro further rated Becton at $3.63 despite yesterdays price of $1.45.
All up there are 15,700 ILUs up for grabs across FKP / Aveo, BBC, Aevum and Becton, plus the management of Macquarie / RVG and Prime Trusts 10,600 ILUs. On top of this are another 5,000 ILUs under development that Lend Lease would pick up if successful in taking all four companies out. Watch this space.
