Australia's Babcock & Brown forms new retirement homes company with Primelife

Australia's Babcock & Brown forms new retirement homes company with Primelife

	Published : Wed, 30 May 2007 02:36 By : Agencies Print this Story

SYDNEY (XFN-ASIA) - Retirement homes operator Primelife Corp Ltd said it has struck a deal with investment and advisory firm Babcock & Brown Ltd to create a new company called Babcock & Brown Communities Group (BCC).

It said the new company is expected to be the largest Australian Stock Exchange listed vehicle with a pure exposure to the ownership, operation and development of Australian and New Zealand senior living communities, with approximately 1.8 bln aud in total assets.

Under the restructure proposal, which is subject to shareholder approval, Primelife will acquire the balance of 74.7 pct of PrimeLiving Trust (PLT) and Babcock & Brown's 55 pct interest in Primelife's development joint venture.

It will then enter into a management agreement with Babcock & Brown and rename itself Babcock & Brown Communities Ltd and reorganize its capital structure into a stapled security to be known as BBC.

It will also conduct a major capital raising of a minimum of 300 mln aud and upon the implementation of BBC and acquire the assets of the Western Australian based Fini Villages.

Primelife said the capital raising has been fully underwritten at a fixed price of 1.15 aud per security by the joint lead managers, ABN AMRO, Rothschild, JPMorgan Australia Ltd and Macquarie Equity Capital Markets Ltd and co-lead managers (CommSec and Tricom).

It said there will also be a discounted priority offer of at least 50 mln aud to existing Primelife shareholders, noteholders, BBC staff and retirement village residents at 1.10 aud per security.

The company said Primelife directors unanimously recommend that Primelife shareholders support the restructure proposal in the absence of a superior proposal.

Primelife chairman Judith Sloan said the deal will allow Primelife to accelerate its business plan, achieve an operational footprint across Australia and New Zealand and be a leader in industry consolidation.

BBC is forecast to have total revenue of 169 mln aud for the year to June 2008.

(1 usd = 1.22 aud)

bruce.hextall@xfn.com