SYDNEY , AUSTRALIA: Aspen Group Limited (ASX: APZ) has announced an offer to acquire all shares of Eureka Group Holdings.
The proposal, known as the Aspen Offer, entails exchanging 0.26 Aspen Securities for each Eureka Share, marking a 15.6% increase from the previously indicated non-binding offer.
Aspen Group, renowned for providing quality accommodation to nearly 40% of Australian households earning under $90,000 annually, has seen its property portfolio expand to over $500 million in the past five years.
The group’s strategy focuses on serving customers who can afford up to $400 per week in rent or $400,000 in purchase price for housing.
The offer values Eureka Shares at $0.46 based on Aspen Securities’ closing price of $1.76 on March 7, 2024, and at $0.55 based on the audited net asset value as of December 31, 2023.
Aspen Group cites its integrated platform, successful management, and broader business model as key factors that will benefit shareholders post-acquisition. The group’s diverse portfolio addresses a larger market than Eureka’s, primarily targeting retirees.
Aspen Group’s acquisition aims to create a more substantial entity with greater economies of scale, potentially enhancing stock liquidity and value. However, if Aspen fails to secure at least 90% of Eureka Shares, the full benefits to Eureka Shareholders may not materialize. The offer is positioned as a strategic opportunity for growth and improved capital management for both companies and their shareholders.