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Hometown America drops due diligence condition for Gateway Lifestyle offer
HOMETOWN America adjusted its takeover bid for Australian retirement village owner Gateway Lifestyle Group on Monday, offering to drop due diligence if the target agreed to its A$695 million (S$699.5 million) cash offer.
Hometown said that its bid, at A$2.30 cash per share, was superior to an identically priced offer from Canadian private equity firm Brookfield Asset Management because Gateway had promised to pay out a 5.35 Australian cent dividend during the bidding contest.
Hometown's cash offer would slip to A$2.25 a share if Gateway was unwilling to sign a bid implementation agreement at the higher price. Gateway said that it was considering the offer.
The bid implementation deal would contain features including a unanimous commitment by Gateway's board to recommend the bid, Hometown said.
Gateway agreed to an exclusive due diligence by Brookfield Property Group, a unit of Canadian alternative asset manager Brookfield Asset Management Inc, which made a non-binding A$2.30 a share offer for Gateway on June 21.
Investing in the retirement sector is viewed by analysts as a means to profit from Australia's ageing population and tap generous government subsidies offered to pensioners. REUTERS