MinterEllison has acted for Hometown Australia Holdings Pty Ltd (Hometown Australia) and Hometown America Holdings, L.L.C. (Hometown America) on the $942 million enterprise value off market takeover bid for Gateway Lifestyle Group (Gateway, ASX: GTY).
Hometown Australia is wholly owned by Hometown America, an operator of residential land lease communities in the United States. Founded in 1997, it currently owns over 60 communities with more than 24,000 homes across the United States. It entered the Australian market in 2017.
Gateway commenced operation in 2009 and listed on the ASX in 2015. Since then, Gateway has become the largest owner and operator of residential land lease communities in Australia. As at 30 June 2018, Gateway's portfolio consisted of 58 residential land lease communities, comprising 7,180 occupied long term occupied sites, 1,447 development sites and 981 short term sites.
MinterEllison's role involved structuring the transaction, which was initially proposed as a scheme of arrangement, but in absence of target agreement, proceeded by way of a competitive off-market takeover bid. In addition, the bid structure initially involved a joint bidding arrangement with a bidder group company acting as bare trustee for two other bidder group entities.
MinterEllison assisted Hometown in pre-bid structuring, documentation and relevant disclosures which was highly valuable to Hometown in what became a competitive auction.
"The pre-bid arrangements involved a number of pre-bid agreements secured with major target security holders, enabling Hometown to announce its bid proposal with an aggregate interest of 18.2% in the target," said Ron Forster, MinterEllison lead Partner. "This gave Hometown a strong defensive position against any potential competitive proposals, including the rival acquisition proposal by Brookfield Property Group."
The bid was subject to various conditions, including FIRB approval, with MinterEllison advising on FIRB analysis, application and approval processes.
"We are pleased to have advised our longstanding client Hometown in connection with the strategic expansion of its residential land lease communities business in Australia," Mr Forster said. "Hometown sees Gateway's portfolio of quality land lease assets as a platform for future growth and investment in Australia."
The MinterEllison team was led by Ron Forster (Partner). He was supported by Nathan Deveson, James Momsen, David Moore (Partners) and Michael Scarf (Senior Associate), Suzie Losanno (Senior Associate), Melissa Lai (Senior Associate), Anna Madafiglio (Lawyer).