The nation's only pure-play over 50s rental accommodation provider has advised the ASX that Melbourne-based Copia Investment Partners has acquired a 6.65% voting power with 20,080 shares held, impacting Aspen’s bid for Eureka.
This announcement came after Eureka formally advised its shareholders to reject Aspen's off-market offer of a merger of 0.26 Aspen securities per Eureka share on 23 January 2024.
Eureka said the proposed bid meant Aspen valued Eureka shares at 0.45. As of this morning, Eureka shares traded at 0.54, one point below its 52-week high.
Eureka, which owns 52 Over 50s rental retirement villages with more than 2,800 units owned or managed, told shareholders to reject Aspen’s offer because:
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The implied value of Aspen's offer is inadequate and represents a discount or no meaningful premium over Eureka’s share price at any time in the last 12 months.
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Eureka major shareholder, Filetron Pty Ltd, which holds approximately 19.29%, has advised Eureka that it does not intend to accept the Offer as described in the Bidder’s Statement,
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The Offer is highly conditional and is not certain to proceed,
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Eureka Shareholders would become exposed to significant new risks in the combined group to which they are not currently exposed. New risks include increased exposure to development activities and reduced exposure to the affordable seniors’ rental retirement living sector from 100% to 41% by portfolio value, and
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Accepting the Offer will restrict Eureka shareholders from dealing with their shares, including participating in any alternative proposal should one emerge.
The Weekly SOURCE reported on 25 March 2024 that Aspen, which provides accommodation in residential communities, retirement villages and holiday parks, had become Eureka's biggest shareholder with 36% share of the business.
Eureka said on 21 March 2024 that increased investment in the listed business by ally Ben Cottle's Filetron to 19.29% meant "Aspen will not be able to achieve the 90% threshold needed to compulsorily acquire all other Eureka shares not held by Aspen."
"Furthermore, scrip-for-scrip rollover relief is only available if Aspen becomes the owner of at least 80% of all Eureka shares. The 19.29% held by Filetron makes it highly unlikely that Aspen will meet the 80% threshold," Eureka stated.
