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- Aspen Group (ASX:APZ) acquired a 13.7 per cent stake in Eureka Group (ASX:EGH) back in late 2022
- The company then made a takeover offer in March 2023 but was knocked back
- Aspen is now running at EGH again with an offer some 16 per cent better than last time
- APZ shares last traded at $1.70
Aspen Group (ASX:APZ) is lobbing an improved takeover offer at counterpart and rival Eureka Group Holdings (ASX:EGH) for 0.27 APZ securities per share of EGH.
This reflects an upgrade to a deal offered nearly a year ago when APZ offered EGH shareholders 0.225 APZ securities on a 1-for-1 basis.
This increase reflects a 15.6 per cent addition to the original offer it made in March 2023.
Eureka offers retirement village tenancy to older Australians, directly up Aspen’s alley.
Deal technicalities
Aspen’s run at Eureka offers EGH shareholders one-quarter of an APZ share for every one in EGH held; with those ordinary shares “staples to one fully paid ordinary unit in the Aspen Property Trust”.
Should all go ahead, Eureka security holders would hold some 27 per cent of the new company. Aspen also argues that its offer is better than it needs to be.
“Aspen’s Offer ratio is above the relative financial contributions of each group in terms of net asset value,” Aspen today wrote.
The company also highlighted its acquisition of a 13.7 per cent stake in Eureka back in late 2022 has “disturbed … the potential for Aspen to make a takeover offer … Aspen’s offer represents a nil-premium merger”.
Aspen’s 2022 acquisition came around the same time EGH shares sank to a two-year low of 40 cents in early December of that year.
It started the year (2022) at 70 cents and steadily declined. Today, The stock has recovered a little beyond its 40 cents mark.
Regardless – or for this reason – Aspen intends to lodge a bidder’s statement to the ASX in the next two months.
EGH still attractive
These points aside, Aspen outlined again its business case for the proposed merger today.
The company likes Eureka’s harmonious operations easily incorporated into its own (on paper, anyway), the prospect of a merged group with a national scale and some 9200 properties including those in the pipeline, and, a highly diversified base of tenant and lease types.
Naturally, Aspen also reports it can get EGH shareholders more bang for their buck.
One thing can’t be denied: Aspen is persistent.
APZ shares last traded at $1.70.
