Hometown America has lodged its long-awaited bidder's statement for the $700 million-tilt at affordable manufactured home group Gateway Lifestyle. It has been a long-dated takeover period, with Hometown trying to beat off a rival offer from Brookfield.and more »
Commercial real estate
By Carolyn Cummins
23 July 2018 — 4:10pm
Hometown America has lodged its long-awaited bidder's statement for the $700 million-tilt of affordable manufactured home group Gateway Lifestyle.
It has been a long-dated takeover period, that has seen Hometown try and beat off a rival offer from Brookfield, as they both see Gateway as the launch pad for their respective affordable homes operations.
But last week talks stalled when Hometown said it would not increase its $2.3535 per Gateway security offer, after its proposed bid implementation agreement was rejected by the target.
Gateway Lifestyle manufactured home at Manly Road in Brisbane
Photo: suppliedGateway's trading price is $2.28.
Gateway chairman Andrew Love said the group was ''not prepared to enter into an agreement that limited our ability to operate the business during what could be a prolonged offer period, while leaving our security-holders exposed to significant uncertainty of a highly conditional offer actually completing''.
Mr Love has again advised shareholders to take no action until the board reviews the Hometown bidder's statement. Brookfield is yet to make any public announcement as it also reviews the document.
Hometown owns 18.2 per cent of Gateway, which could prove a hurdle for any rival bid.
In the bidder's statement, Hometown is offering $2.25, plus Gateway's 5.35¢ distribution and says it is a ''superior offer to Brookfield''.
''The Hometown Offer provides an opportunity for Gateway security holders to realise liquidity at a significantpremium, particularly in the context of recent Gateway Security price underperformance,'' the bidder's statement says.
The attraction for the business, which manufactures homes on estates aimed at retirees who buy a leasehold property and then pay rent for the land to Gateway, is the growth in demand from an ageing population and the income stream from the rent.
Carolyn Cummins is Commercial Property Editor for The Sydney Morning Herald.
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