American manufactured homes developer Hometown America Corp. is offering A$2.10 per security to buy Australian peer Gateway Lifestyle Group under a scheme of arrangement.
The confidential, indicative and nonbinding proposal was submitted June 12 by Hometown Australia Holdings Pty. Ltd. and Hometown America Communities LP. It is subject to various conditions and approvals, with a formal binding offer not guaranteed.
Based on the outstanding 303,653,580 shares of Gateway Lifestyle, as of May 2, the offer translates to a value of A$637.7 million. The indicative offer price may also be reduced by the value of any dividends or distributions that will be announced after June 12.
The target has not granted Hometown its request for a four-week exclusive due diligence access, as of June 13. Security holders are also advised to not take any action in relation to the offer.
Prior to making the bid public, Hometown entered into agreements with four Gateway Lifestyle security holders that collectively own a 17.5% stake in the company.
To evaluate the offer, Gateway Lifestyle appointed Fort Street Advisers as its financial adviser and Herbert Smith Freehills to provide legal advice. Hometown, on the other hand, hired Morgan Stanley and Minter Ellison as its advisers for the deal, The Australian Financial Review reported.
Hometown has more than 60 residential land lease communities spread over 11 U.S. states and is sponsored by private equity firm Calzada Capital Partners LLC. Gateway Lifestyle has A$686 million in assets composed of land lease communities and mixed-use properties.