Lend Lease deal aids cash-strapped B&B

Lend Lease will also make a placement of $170 million of shares to BBC holders at 68c, compared with BBC's closing price of 47c, and sell eight of its retirement properties to BBC.

In signing the deal, BBC has formally rejected the Prime Retirement and Aged Care Trust's unsolicited $130 million scrip offer made on September 4.

BBC will convene a security holder meeting to approve the Lend Lease proposal at a date to be decided before December 12.

BBC is the first of the satellites in the Babcock & Brown investment bank stable to see a change in management. It will remain listed but its name will change.

BBC has been undertaking a strategic review of its business for two months when its manager, B&B, revealed it needed cash and would sell the rights to BBC for a total of $17.5 million. B&B will also sell its 12.45 per cent direct stake in BBC to Lend Lease at the equivalent of 58c a security.

B&B's chief executive, Michael Larkin, whose company is to get a cash injection of $66.8 million in two tranches, said he was pleased with the restructure.

The deal will enable Lend Lease to expand its "Retirement by Design" retirement home operations, without having to make a formal, expensive takeover.

The outgoing managing director of Lend Lease, Greg Clarke, said: "The retirement industry has a number of strategic benefits for Lend Lease. This transaction provides us with significant exposure to the sector through becoming the manager of, and major investor in, Australia's leading pure-play operator."

BBC is Australia's second-largest listed retirement sector and aged care owner and operator. It operates 56 retirement villages and 29 aged care facilities in Australia and New Zealand.

The chairman of BBC's independent directors committee, Andrew Love, said the deal was considered superior as it has kept BBC listed but with a capital injection and new management.

He said the independent directors intended to vote in favour of the Lend Lease offer.