August 20, 2018 / 12:14 AM / a month ago

UPDATE 1-Australia's Gateway Lifestyle backs Hometown offer

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Aug 20 (Reuters) - Australian retirement village owner Gateway Lifestyle on Monday recommended shareholders accept Hometown America’s A$695 million ($508.5 million) takeover offer, after a pursuit involving a rival suitor.

The A$2.25 offer price is at a slight discount of 0.4 percent to Gateway’s last close.

Hometown first made an offer in June at A$2.10 per share, valuing the firm at A$635 million. This was closely followed by Canada’s Brookfield Asset Management Inc launching a A$2.30 per share offer for Gateway.

Later in June, Hometown upped its price to A$2.35 per share and then to A$2.30 to reflect a 5.35 Australian cents dividend that Gateway had promised to pay out during the bidding contest.

Hometown had said the A$2.30 held without due diligence or it would slip to A$2.25 if Gateway was unwilling to agree to the higher price.

Gateway initially rejected these offers as well, but appears to have changed its mind after Australia media reported that Brookfield was set to exit the race.

While backing the A$2.25 offer on Monday, Gateway directors also urged security holders to consider the outstanding conditions of Hometown’s offer. ($1 = 1.3669 Australian dollars) (Reporting by Devika Syamnath in Bengaluru; Editing by Stephen Coates)

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