Aevum awaits second Stockland bid
Stockland Corporation Limited (ASX: SGP) is expected to make a second offer within the week after Aevum Limited (ASX: AVE) considered its offer as “neither fair nor reasonable.”
Valuation specialist Lonergan Edwards & Associates placed Aevum shares to value between $1.92 - $2.22 each. Aevum's chairman Graham Lenzner placed the mid-point valuation at $2.07 a security. Stockland's offer price is $1.50 a share.
Lenzner said, “Basically, the ball is back in their court. They've made the offer (which) we rejected immediately. Now there is so much more evidence that the company is worth more.” The retirement home head claimed that accounting firm PricewaterhouseCoopers supported Aevum's forecast and balances.
A cash flow of $50 million is expected for the current financial year. Aevum made a statutory profit of $19.3 million in the 2009 – 2010 financial year, recovering from a loss of $12.2 million in the previous year.
Other market analysts like Austock Securities analyst Rohan Sundram placed Aevum's net tangible assets (NTA) at $2.12. Royal Bank of Scotland's Jo Little placed a lower value of $1.98 per unit.
The Austock valuation included Aevum's potential development profit, but excluded the future deferred management fee. According to Sundram, “If the future fees were included, it'll probably add 15 cents to the NTA.”