Australia's Ingenia hits 9-month high on AVID's $1.5 billion buyout bid

Ingenia Communities Group received a takeover proposal from AVID ‌Property Group for A$2.2 billion ($1.54 billion), sending the Australian property developer's shares to their highest close in nine months. Ingenia, which develops and operates communities offering rental and holiday accommodation, has already received three bids from Warburg ‌Pincus, sending its shares up more than 35% since the first offer in September. The ‌stock jumped as much as 9.1% on Monday before closing up 5% at A$5.

AVID's bid to buy all Ingenia shares at A$5.4 is higher than Warburg Pincus' latest offer of A$5.25 apiece and at a 13.4% premium to Friday's closing ⁠price. The ​Ingenia board has decided ⁠to enter into a process deed with AVID and give it a period of "soft exclusivity" of up to six weeks, ⁠the company said, terminating Warburg Pincus' access to its data room. Last week, Ingenia set an October 23 ​deadline to sign a process deed with Warburg Pincus.

The AVID offer, which has backing from ⁠an unnamed global sovereign wealth fund and a global financial sponsor, hinges on Ingenia terminating a planned A$992.5-million acquisition of Peet, announced ⁠in ​late August. "Ingenia is clearly an attractive set of assets that've been underpriced due to a mix of the Peet deal terms and the general despondent sentiment towards residential real estate amidst several ⁠RBA rate hikes and the Federal Budget changes earlier this year," said Cameron Curko, CIO at ⁠Pitcher Partners.

"The arrival of ⁠a superior bid in that context is not surprising particularly as it was a case of participate or lose out on the opportunity." ($1 = 1.4241 Australian ‌dollars)