By Sherin Sunny and Kumar Tanishk
Aug 26 (Reuters) - Property developer Ingenia Communities on Wednesday offered to buy Peet in a deal valuing the residential property developer at A$992.5 million ($710.93 million), to expand its presence in the Australian housing market.
The proposal follows a period of softer sales volumes and prices in Australia's residential property market, and a government decision to trim tax concessions for investment properties in its May budget.
Under the proposal, Peet shareholders
would receive A$0.68 in cash and 0.3367 Ingenia stapled securities for each share held, implying a value of A$2.12 per share.
Ingenia's implied offer represented a 17.1% premium to Peet's closing price on August 21, before the stock entered a trading halt.
A rival bid looks unlikely given the price, said Datt Capital Managing Director Emanuel Ajay Datt, adding that the absence of a superior proposal clause is standard for major shareholders in scheme deals.
Ingenia said Peet's board unanimously recommended the offer in the absence of a better proposal and that Peet's largest shareholder, Scorpio Nominees, intended to accept the offer.
Peet, founded in 1895, is a major master-planned community developer in Australia.
The Flagstone City -- a master-planned community project in south-east Queensland encompassing housing, retail and commercial precincts -- is central to Ingenia's case for buying Peet.
Ingenia said a proposed joint venture values the project at A$615 million and would see a capital partner buy a 49.9% stake, helping fund the deal and supporting the asset's valuation.
However, the joint venture remains subject to binding documentation, due diligence and other completion conditions.
Flagstone remains the transaction’s foremost execution risk, Datt warned, adding partnerships of such scale and complexity often outpace management-projected timelines.
Peet shares closed 11.1% higher at A$2.01 after rising as much as 12.7% in intraday trade, while Ingenia fell 6.3%. The benchmark ASX200 closed 0.4% lower.
($1 = 1.3961 Australian dollars)
(Reporting by Sherin Sunny in Bengaluru; Additional reporting by Kumar Tanishk; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)
