There’s nothing like a takeover bid at a 100 per cent premium to your previous closing price and that’s just what Devine (ASX:DVN) shareholders received this morning.

The residential property developer (which was capitalised at under $20 million only yesterday) has CIMIC Group (ASX:CIM) as its biggest shareholder, owning 59.11 per cent, but CIMIC has made a bid for the remaining 40.89 per cent.

CIMIC made its bid at 24 cents, a 100 per cent premium to yesterday’s closing price, which will cost it $15.6 million.

Devine’s ASX shareholders responded accordingly.

Devine (ASX:DVN) share price chart

 

Why the bid?

CIMIC did not make comments beyond the obvious point that the deal will allow Devine shareholders to exit without paying brokerage and in an orderly manner.

A spokesperson for CIMIC was reluctant to speak further when contacted by Stockhead for comment.

Nevertheless it was noted the offer would be paid with funds at call and the Foreign Investment Review Board has given its approval.

Devine told its shareholders it was considering the offer but at this stage told its shareholders to take no action.

The company made a $4.4 million loss after tax in FY20, impacted by asset impairments in three of its projects.

However it said it would continue to progress existing projects and position itself for the purchase of new development sites where good value existed.

Devine is not the first ASX property developer to rocket in recent months. Its peer Ultima United (ASX:UUL) has grown from 2 cents to 80 cents in the last year.

In mid-March 2021, when it was over $1, it sat as the best gaining ASX stock since the COVID-19 market crash.

This is despite the company itself saying in its half yearly report there were few significant events in the new year.

Ultima United has projects in Australia and Japan is looking at developing special disability accommodation under the National Disability Insurance Scheme – aiming to raise $20.19 million.

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