David Dixon and John Carter (pictured below) look to be stymied in their current bid to buy the country’s only pure play owner/operator of over-55s rental communities and create a $500 million affordable housing company.
Aspen Group’s CEOs have coveted Eureka’s 52 seniors rental villages, with more than 2,800 units owned or managed across Australia since before February 2023 when it offered 0.225 securities per Eureka share before withdrawing.
Four months later in June of last year, Eureka posted a 137% jump in net profit.
To win Eureka, Aspen requires 90% of the Eureka shareholders to accept their offer.
On 23 January this year, Aspen announced an improved takeover offer for 0.27 Aspen Group securities per share of Eureka, a 15.6% increase on Aspen's original offer.
This was rejected by the Eureka Board of Directors, led by Executive Chairman Murray Boyte. Last Thursday, Aspen offered 0.28 of its own shares for every Eureka share, in a best-and-final bid that ends on 28 May.
Over the journey Eureka was able to secure Ben Cottle, founder, primary shareholder and Non-Executive Chairman of the FDC Group of companies, to buy 19.68% of Eureka. When this is combined with the 2.3% of shares owned by Murray Boyte and co-director Greg Paramour AO, Aspen is unable to achieve the 90% threshold to compulsory acquire all Eureka shares and will be unable to reach the 80% threshold requirement, meaning the scrip-for-scrip rollover relief will not be available to Eureka shareholders who accept the Aspen offer.
Ben Cottle stated again that he would not accept Aspen’s offer.
However, Aspen is now Eureka’s shareholder and could become a disruptor. It will be interesting days because all four key directors, David Dixon and John Carter for Aspen and Murray Boyte and Greg Paramour for Eureka, are experienced board players.
Browse villages.com.au for the latest on Seniors Living including availability.
