Australia's Ingenia rebuffs revised $1.5 billion takeover bid from Warburg Pincus

Australia's Ingenia Communities Group said on Monday it had rejected a A$2.06 billion ($1.47 billion) takeover bid from Warburg Pincus, the private equity firm's second attempt to buy the land-lease community operator.

Warburg's latest offer, at A$5.05 cash per share, is nearly 6.3% higher than its previous A$1.94-billion offer, and represents a premium of 16.9% to Ingenia's last closing price.

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It retained an earlier condition that Ingenia abandon its planned $711-million acquisition of master-planned communities developer Peet, a deal Ingenia sees as central to its strategy.

Ingenia's board told the stock exchange the offer 'substantially' undervalued the firm and was not in shareholders' best interests.

"Our discussions with investors since the initial offer suggest that while they see takeover valuation as being significantly higher, an all-cash takeover price in the range of A$5.25 to A$5.50 would be compelling in the near term especially given an uncertain residential environment," Citi analysts said.

Shares of Ingenia rose 2.6% to A$4.43 earlier in the session, their highest levels since mid-August.

"Warburg Pincus is disappointed by Ingenia's decision not to engage on our materially improved proposal," the private equity firm said of the September 14 bid that followed an August 30 initial proposal.

The offer represented a superior and compelling all-cash alternative to the Peet transaction for Ingenia security holders and set a strong basis for further talks and due diligence, it added in a statement.

The Ingenia board said it remained open to considering proposals that represent 'compelling' value, and was confident in the company's strategic direction and growth trajectory.