Proprium Capital Bests Ho Bee Land With $228M Offer for Aussie Homebuilder

AVJennings has accepted Proprium Capital Partners’ A$365 million ($228 million) bid to take over the Australian homebuilder, as Singapore-based Ho Bee Land chose not to follow up its own acquisition proposal with a binding offer.

US investment manager Proprium and its Sydney-based Avid Property Group unit are set to buy ASX-listed AVJennings, whose majority shareholder is Singapore’s SC Global Developments, for 65.5 Australian cents per share, in contrast with Ho Bee Land’s non-binding offer of 70 cents.

SC Global, led by founder and chairman Simon Cheong, controls 54.02 percent of AVJennings’ issued share capital and has notified the Melbourne-based builder that it intends to vote in favour of the Proprium offer, according to a Tuesday stock filing. The offer represents a 98.5 premium to the closing price of AVJennings shares on 27 November 2024, the day before Avid revealed its proposal.

In a separate statement, Proprium partner and Avid chairman Anthony Kingsley said the buy would enhance the firm’s portfolio with “highly complementary assets” from AVJennings’ 9,800-lot land bank.

“We believe the offer represents attractive value for AVJennings shareholders, and we welcome the AVJennings board’s recommendation in favour of the scheme,” Kingsley said.

Leadership Ties Not Enough

The transaction remains subject to various customary conditions, including regulatory and shareholder approval and the endorsement of an independent expert’s report.

With Australia already accounting for more than a third of its business, Ho Bee Land in January made a A$390.7 million bid to add AVJennings to its presence Down Under, having recently built a 5.49 percent stake in the builder.

Ho Bee Land’s offer represented a 4.5 percent premium to Avid’s bid. Before the Singaporean firm mounted its challenge to Avid’s proposal, which had been in the works since last July, the AVJennings board expressed a “unanimous view” that the US investor’s deal gave shareholders a chance to realise their investment at a price significantly above historic trading levels.

Ho Bee Land and AVJennings have leadership ties spanning nearly two decades through former KPMG Singapore managing partner Bobby Chin, who joined AVJennings as a director in October 2005 and became a Ho Bee Land board member the following year.

The battle for AVJennings was not the first encounter between Ho Bee Land and Avid, with the US-backed firm in 2019 having bought out Villa World when Ho Bee Land was the then-ASX-listed developer’s largest shareholder. Ho Bee Land had responded to Avid’s initial offer by increasing its stake in the company, with Villa World’s shareholders eventually accepting Avid’s proposal, which led to the developer’s privatisation.

After the privatisation, former Villa World chief operating officer Michael Vindolac joined Ho Bee Land as its Australia CEO in February 2020.

Open to Opportunities

Ho Bee Land said Tuesday that it had decided not to proceed with its own binding offer for AVJennings after the announcement of the homebuilder’s acceptance of the rival offer.

“The company values its presence in Australia and remains open to opportunities that align with its long-term business objectives,” Ho Bee Land said in a release. “The company appreciates the engagement of AVJ’s board and management and wishes them continued success.”

Connecticut-based Proprium acquired Avid nine years ago for A$340 million, back when the company was Investa Property Group’s Investa Land development division. Avid has delivered A$4.2 billion worth of projects and has a A$5 billion pipeline on a revenue basis.

Mingtiandi reported in February that Proprium’s Anton Real Estate Partners had joined forces with PGIM Real Estate to acquire a Sydney commercial building, 20 Bridge Street, from Hong Kong toy tycoon Francis Choi for A$270 million ($169.2 million).

In Japan, Proprium teamed with Abu Dhabi’s Mubadala Investment Company and Canadian giant Manulife in 2023 on a joint venture to assemble a multi-family portfolio worth up to JPY 80 billion (then $600 million).