Arvida Group Limited — Capital/Financing Update 2017

Sep 18, 2017

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This is an important document. You should read the whole document before deciding whether to subscribe for shares. If you have any doubts about what to do, please consult your broker, financial, investment or other professional adviser.

IMPORTANT INFORMATION

General Information

This Offer Document has been prepared by Arvida Group Limited (Arvida) in connection with a pro rata 1 for 5 renounceable rights offer of ordinary shares (Offer). The Offer is made under the exclusion in clause 19 of Schedule 1 of the Financial Markets Conduct Act 2013 (FMCA). This Offer Document is not a product disclosure statement for the purposes of the FMCA and does not contain all of the information that an investor would find in such a document or which may be required in order to make an informed investment decision about the Offer or Arvida.

Additional information available under continuous disclosure obligations

Arvida is subject to continuous disclosure obligations under the Listing Rules. Market releases by Arvida and the Investor Presentation, are available at www.nzx.com under the code ARV.

Offering Restrictions

No action has been taken to permit a public offering of the New Shares in any jurisdiction outside New Zealand, Australia or Fiji. The distribution of this document in a jurisdiction outside New Zealand, Australia or Fiji may be restricted by law and persons who come into possession of it (including nominees, trustees or custodians) should seek advice on and observe any such restrictions.

No person may subscribe for, purchase, offer, sell, distribute or deliver New Shares, or be in possession of, or distribute to any other person, any offering material or any documents in connection with the New Shares, in any jurisdiction other than in compliance with all applicable laws and regulations. Without limitation, this document may not be sent into or distributed in the United States.

No Guarantee

No person named in this document (nor any other person) guarantees the New Shares to be issued pursuant to the Offer or warrants the future performance of Arvida or any return on any investment made pursuant to this document.

Decision to participate in the Offer

The information in this Offer Document does not constitute a recommendation to acquire New Shares nor does it amount to financial product advice. This Offer Document has been prepared without taking into account the particular needs or circumstances of any Applicant or investor, including their investment objectives, financial and/or tax position.

Privacy

Any personal information provided by Eligible Shareholders online or on the Acceptance Form will be held by Arvida and/or the Registrar at the addresses set out in the Directory. This information will be used for the purposes of administering your investment in Arvida. This information will only be disclosed to third parties with your consent or if otherwise required by law. Under the Privacy Act 1993 (New Zealand), you have the right to access and correct any personal information held about you.

Enquiries

Enquiries about the Offer can be directed to an NZX Primary Market Participant, or your solicitor, accountant or other professional adviser. If you have any questions about the number of New Shares shown on the Acceptance Form that accompanies this document, or how to apply online or to complete the Acceptance Form, please contact the Registrar.

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CHAIRMAN’S LETTER

19 September 2017

Dear Arvida shareholder

Acquisition and pro rata renounceable rights offer

On behalf of the directors of Arvida Group Limited (Arvida), I am pleased to present you with the opportunity to participate in this offer of new shares to assist in funding Arvida’s acquisition of three high quality retirement and care facilities.

On 12 September 2017, Arvida announced that it had entered into agreements to purchase Mary Doyle Lifecare, Strathallan Lifecare and 50% of Village at the Park Lifecare (the Villages) from Hurst Lifecare Group (Hurst Lifecare), subject to customary approvals. Hurst Lifecare became a foundation shareholder of Arvida selling Rhodes on Cashmere to us in the IPO. They are well known to us and interests related to Hurst Lifecare remain holders of shares issued at the IPO.

Mary Doyle Lifecare – Havelock North

Mary Doyle is situated in Havelock North, in the Hawkes Bay region. It is a large scale retirement village spread across more than 13 hectares with 227 units and 155 co-located care beds. The care facility provides rest home, hospital and dementia level care to residents. The village is centrally located in Havelock North close to amenities and is set on landscaped grounds bordering the Karamu Stream.

An ongoing development programme includes conversion of rooms to care suites and the progressive addition of villas with approximately 2.2 hectares of bare land available for future development.

Strathallan Lifecare - Timaru

Strathallan is an integrated village and purpose built care facility located in the regional town of Timaru, South Canterbury. Originally built between 1996 and 2000, the village was extended in 2010-2011 adding a further 15 villas and 27 serviced apartments. The village now comprises 51 villas, 47 serviced apartments and 76 care beds.

Strathallan is a premier facility in Timaru enjoying a strong reputation in the local market. Traditionally occupancy rates in the care facility have been close to 100%.

Village at the Park Lifecare - Wellington

Village at the Park is located between the suburbs of Newtown and Berhampore, approximately 4km south of the Wellington CBD. It is a modern facility, with development on site commencing in circa 2000 and progressively thereafter. The current development (known as Block D) adds 28 apartments and is due for completion in November 2017 (with 21 apartments having been pre-sold to date). On completion of Block D, the village will comprise 38 villas, 116 apartments and 84 care beds. A further 24 apartments and 16 villas are included in future development plans.

The facility is to be jointly owned with The Wellington Tenths Trust, with Arvida assuming responsibilities for the day-to-day management of all village operations. The Wellington Tenths Trust is a long term owner and manager of significant land holdings in the Wellington region. It has held an interest in Village at the Park from inception.

…continued over

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Collectively, the Villages add 451 retirement units and 315 care beds to Arvida’s portfolio and include the opportunity to add an estimated 110+ units/beds over time. The three Villages are of a high quality and complementary to our existing portfolio, with a continuum of care at all sites and brownfield development opportunities. They expand our geographic footprint and enable us to further leverage our scalable operating model.

Since Arvida’s IPO of 18 villages, we have acquired eight villages across four separate transactions. This is consistent with our strategy stated at the time of IPO of consolidating the aged care sector in New Zealand. Total shareholder returns of 53% have been delivered since IPO.

As with previous acquisitions, this transaction is expected to be immediately underlying earnings per share accretive with an approximate 8% increase in FY18 on a pro forma basis[1] . Additional operating cash flow of $17 million is expected to be derived from the Villages in FY18 on a pro forma basis.

The purchase price[2] of $106 million represents a 5% discount to CBRE valuation.

Vendors have elected to subscribe for $16 million Arvida ordinary shares as part consideration. Arvida is raising approximately $77 million of new capital to partially fund the cash component of the purchase price. The balance of the cash consideration will be funded by drawing on existing bank facilities.

The capital raising is in the form of an underwritten pro rata renounceable rights offer to existing shareholders. Under the Offer, Eligible shareholders may subscribe for 1 New Share for every 5 existing shares held as at 5.00pm on 20 September 2017, at a price of $1.15 per share. Arvida directors and senior executives intend to take up all of their entitlements under the Offer, except for Michael Ambrose whose associated interests intend to apply for around 66,000 shares under the Offer. Shareholders who choose not to take up their Rights, or who sell Rights, will have their percentage shareholding diluted.

Your Rights are of value. This document sets out important information about the Offer, including your options in taking up, selling or renouncing your Rights. Before making your investment decision, I encourage you to read this document in full and also to consider the information disclosed by Arvida to NZX (in particular the Investor Presentation) and other information available at www.nzx.com under the ticker code “ARV”. If you are in doubt as to what you should do, you should consult your financial/professional adviser or an NZX Broker. Thank you for your continued support.

Yours sincerely

PETER WILSON CHAIR, ARVIDA GROUP LIMITED

1. Based on Arvida management expectations for the pro forma 12 month earnings contribution (i.e. assuming a full 12 months of ownership) from the acquired villages in FY18 that were prepared as part of Arvida’s due diligence, there being no material change to the run rate performance or growth of those businesses during the period, and excludes costs related to the transaction and equity raising.

2. Enterprise value of $106m includes $10m of bank debt at Village at the Park (50% of Village at the Park’s existing bank debt of $20m) and excludes estimated total transaction costs of $3m and working capital adjustments.

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IMPORTANT ELEMENTS OF THE OFFER

Issuer	Arvida Group Limited
The Offer	An underwritten pro rata renounceable rights issue of 1 New Share for every
	5 Existing Shares held on the Record Date (with fractional entitlements being
	rounded down to the nearest share).
	New Shares:
	• not taken up by Eligible Shareholders; or
	• which are attributable to the rights of Ineligible Shareholders,
	will be offered to Eligible Bookbuild Investors through a Bookbuild run by the
	Lead Manager. Any Premium achieved above the Issue Price for New Shares
	in the Bookbuild will be paid (with no brokerage costs deducted) on a pro
	rata basis to those Shareholders who do not take up their Entitlements or
	who are ineligible to do so.
Eligible Shareholder	A Shareholder, as at 5.00pm (NZ time) on the Record Date, with a registered
	address in New Zealand, Australia or Fiji, who is not in the United States and
	not acting for the account or beneft of a person in the United States.
Rights	The right to subscribe for New Shares under the Offer. Eligible Shareholders
	have an entitlement to subscribe for 1 New Share for every 5 Existing Shares
	held on the Record Date (5.00pm 20 September 2017).
	Eligible Shareholders may take upsomeorallornoneof their Rights.
	Alternatively, Eligible Shareholders may sell some or all of their Rights on the
	NZX Main Board between 19 September and 3 October 2017.
	If an acceptance and a renunciation are received in respect of the same
	Right(s), the renunciation will be given priority to the acceptance.
Issue Price	$1.15 per New Share.
Offer size	The amount to be raised under the Offer is approximately $77 million.
No Oversubscriptions	There is no oversubscription facility for this Offer.
New Shares	Shares of the same class as, and that rank equally with, Existing Shares on
	the Issue Date. The Shares will not have an entitlement to dividends prior to
	the Issue Date.
Existing Shares	334,260,879 Existing Shares quoted on the NZX Main Board.
currently on issue
Maximum number of New	66,852,175 New Shares (subject to rounding).
Shares being offered	In addition, a maximum of 12,628,260 shares will be issued to the sellers of
	the Villages. These shares will be issued under Arvida’s headroom under
	Listing Rule 7.3.5(a) and will be issued at a price adjusted for any Shares
	issued under this offer.
How to apply	Applications must be made online at_www.arvidashareoffer.co.nz_or by
	completing the enclosed Acceptance Form and returning it to the Registrar
	together with payment in New Zealand dollars. If a postal application is made
	please allow plenty of time for it to be received by us.
Offer underwritten	The Offer is fully underwritten by Forsyth Barr Group Limited.

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IMPORTANT DATES

IMPORTANT DATES
Announcement of the Offer	12 September 2017
Rights trading commences on the NZX Main Board	19 September 2017
Record Date for determining Entitlements	5.00pm, 20 September 2017
Offer Document, Acceptance Forms sent to Eligible Shareholders	21 September 2017
Rights trading ends on the NZX Main Board	5.00pm, 3 October 2017
Closing Date for the Offer (last day for online applications, or for	7.00pm, 9 October 2017
receipt of the Acceptance Form, with payment)
Bookbuild closing date	11 October 2017
Allotment of New Shares under the Offer (Issue Date)	13 October 2017
Expected date for quotation of New Shares issued under the Offer	16 October 2017
Payment of any Premium achieved in the Bookbuild	17 October 2017
Mailing of holding statements	by 18 October 2017

These dates are subject to change and are indicative only. Arvida reserves the right to amend this timetable (including by extending the Closing Date of the Offer) subject to applicable laws and the Listing Rules. Arvida reserves the right to withdraw the Offer and the issue of New Shares at any time before the Issue Date at its absolute discretion.

DETAILS OF THE OFFER

The Offer

The Offer is for New Shares in Arvida in a pro rata renounceable rights issue. Eligible Shareholders can subscribe for 1 New Share per 5 Existing Shares held on the Record Date. Any fractional Entitlements will be rounded down to the nearest whole number.

The New Shares will be of the same class as, and will rank equally with, the Existing Shares quoted on the NZX Main Board. It is a term of the Offer that Arvida will take any necessary steps to ensure that the New Shares are, immediately after the issue, quoted.

The maximum number of New Shares under the Offer is 66,852,175. The Rights will be listed on the NZX Main Board and can be traded.

Entitlements which are not taken up (and those attributable to Ineligible Shareholders) will be offered to Eligible Bookbuild Investors (which may include Eligible Shareholders, whether or not they took up their full Entitlement under the Offer). Applications once made cannot be withdrawn.

Shareholders, may receive some value in respect of those Rights if a Premium is achieved under the Bookbuild. There is no guarantee that any premium will be achieved.

Further details are set out under “The Bookbuild” below.

Issue Price

The Issue Price is $1.15 per New Share and must be paid in full on application online and by direct credit payment, or with a completed Acceptance Form which must be delivered to the Registrar in accordance with the instructions set out in the Acceptance Form.

Arvida may choose to accept late applications and application payments but has no obligation to do so. Arvida may accept or reject any Acceptance Form which it considers is not completed correctly, and may correct any errors or omissions on any online application or Acceptance Form.

Eligible Shareholders who do not take up, renounce or sell their full Entitlement and Ineligible

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Application monies will be held in a trust account with the Registrar until the New Shares are allotted or the application monies are refunded. Interest earned on the application monies will be retained by Arvida whether or not the issue and allotment of New Shares takes place.

Any refunds of application monies will be made within five Business Days of allotment or of any decision not to proceed with the Offer.

Eligibility

The Offer is only open to Eligible Shareholders and persons that Arvida is satisfied can otherwise participate in compliance with all applicable laws.

The Offer will be made only in New Zealand, Australia and Fiji. Arvida considers that offering it wider would be too onerous given the costs of complying with the legal requirements in other jurisdictions and the small number of Shareholders the Offer would likely attract.

This Offer Document is restricted to Eligible Shareholders with a registered address in New Zealand, Australia or Fiji, as at 5.00pm (NZ time) on the Record Date, who are not in the United States and are not acting for the account or benefit of a person in the United States.

The distribution of this Offer Document (including an electronic copy) outside New Zealand may be restricted by law. Any failure to comply with such restrictions may contravene applicable securities law. Arvida disclaims all liability to such persons.

The Rights of all Ineligible Shareholders will be will be included in the Bookbuild.

Opening and Closing Dates

The Offer will open on 19 September 2017 and close (for both applications made online, or by the Acceptance Form) at 7.00pm (NZ time) on 9 October 2017, subject to Arvida varying those dates in accordance with the Listing Rules.

Oversubscription Facility

There is no oversubscription facility. Shareholders who wish to acquire more New Shares than their Entitlement may do so by acquiring Rights from Shareholders who have renounced such Rights.

The Bookbuild

New Shares attributable to Entitlements which are not taken up by Eligible Shareholders (together with those attributable to Rights of Ineligible Shareholders) will be offered to Eligible Bookbuild Investors (which may include Eligible Shareholders, whether or not they took up their full Entitlement under the Offer). The Bookbuild is expected to open on 10 October 2017 and close on 11 October 2017.

The Clearing Price under the Bookbuild will be equal to or above the Issue Price.

If the Clearing Price in respect of the Bookbuild is equal to the Issue Price:

• Arvida will receive the Issue Price for all New Shares issued to Eligible Bookbuild Investors under the Bookbuild; and

• no cash will be payable to any Eligible Shareholder or Ineligible Shareholder.

If the Clearing Price in respect of the Bookbuild is above the Issue Price:

• Arvida will receive the Issue Price for all New Shares issued to Eligible Bookbuild Investors under the Bookbuild; and

• the extent to which the Clearing Price exceeds the Issue Price (the Premium) will be paid by the Lead Manager to the Registrar, who will remit the Premium pro rata to:

• each Eligible Shareholder who did not take up their Entitlement in full (with respect to only the part of the Entitlement they did not take up); and

• each Ineligible Shareholder.

If the Bookbuild does not clear all remaining New Shares, the Underwriter will subscribe for any New Shares remaining after the Bookbuild.

There is no guarantee that any value will be received from the Bookbuild by Eligible Shareholders who did not take up their full Entitlement or Ineligible Shareholders. None of Arvida, the Lead Manager, the Underwriter or any of their respective directors, officers, employees, agents or advisers will be liable for a failure to achieve a price in the Bookbuild that is greater than the Issue Price.

Any Premium achieved under the Bookbuild will be announced by Arvida on the NZX Main Board.

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Underwriting Agreement

The Underwriter has fully underwritten the Offer. This means that the Underwriter will subscribe at the Issue Price for those New Shares which are not taken up either by Eligible Shareholders or under the Bookbuild in accordance with the terms of the Underwriting Agreement.

The principal terms of the Underwriting Agreement are as follows:

• The Underwriter will be paid an underwriting fee of 2.00% of the underwritten amount.

• The Underwriter may terminate its obligations under the Underwriting Agreement on the occurrence of a number of events which are usual for an offer of renounceable rights.

• Arvida has agreed to indemnify the Underwriter in connection with the underwrite against certain losses.

• Arvida is restricted from offering further Shares or securities (subject to usual exclusions) for three months after the Allotment Date, or otherwise enter into any agreement whereby any person may be entitled to the allotment and issue of any Shares or other equity securities by Arvida, or make any announcement of an intention to do any of the foregoing, other than pursuant to the Offer.

Allotment and Issue of New Shares

New Shares issued pursuant to the exercise of Rights are expected to be allotted and issued by 13 October 2017. Holding statements confirming the allotment of your New Shares will be issued and mailed in accordance with the Listing Rules.

Terms and Ranking of New Shares

New Shares will be the same class as, and rank equally in all respects with, Existing Shares on the NZX Main Board on the Issue Date. They will give the holder the right to one vote on a resolution at a meeting of Shareholders (subject to any restrictions in Arvida’s constitution or the Listing Rules), the rights to dividends authorised by the Board and the right to a proportionate share in any distribution of surplus assets of Arvida on any liquidation.

Arvida’s current dividend policy is to distribute between 60% and 80% of underlying profit per

annum. Dividends are intended to be paid on a quarterly basis.

Rights

If you are an Eligible Shareholder you may subscribe for all or some of your New Shares, sell your Entitlement or allow your Entitlement to lapse.

Stamping Fee

A broker stamping fee of 0.5% subject to a maximum of $250 will be paid on successful applications. The fee will be paid by the Underwriter.

The Underwriter reserves the right to decline payment of broker stamping fees where it considers that holdings have been split or otherwise structured to take advantage of the stamping fee arrangements. In the event that the total broker stamping fees payable exceed $30,000, the payment will be scaled back on a pro rata basis. No broker stamping fee will be payable in respect of applications for New Shares under the Bookbuild.

Minimum Amount to be Raised

There is no minimum amount that must be raised for the Offer to proceed. While the Offer is intended to partially fund the acquisitions described earlier in this document, you should note that the Offer may proceed even if one or more of the acquisitions does not complete.

NZX Main Board Quotation

Application has been made for permission to quote the Rights on the NZX Main Board and all NZX requirements have been duly complied with. However, NZX accepts no responsibility for any statement in this Offer Document.

The New Shares have been accepted for quotation by NZX and will be quoted upon completion of allotment procedures. NZX Main Board is a financial product market operated by NZX, a licensed market operator, under the FMCA.

Governing law

This Offer is governed by New Zealand law and you submit to the exclusive jurisdiction of the courts of New Zealand.

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GLOSSARY

Arvida	means Arvida Group Limited.
Bookbuild	means the bookbuild process conducted by the Lead Manager under
	which New Shares attributable to Entitlements that are not taken up
	by Eligible Shareholders, together with New Shares attributable to
	Entitlements of Ineligible Shareholders, are offered to Eligible Bookbuild
	Investors (which may include Eligible Shareholders, whether or not they
	took up their full Entitlement under the Offer).
Business Day	has the meaning given to that term in the Listing Rules.
Clearing Price	means the price determined by the Board in consultation with the Lead
	Manager through the Bookbuild process for New Shares offered in the
	Bookbuild, and is expected to be set at the highest price at or above the
	Issue Price that will clear the book of New Shares available under the
	Bookbuild.
Closing Date of the Offer	means 7.00pm (NZ time) on 9 October 2017.
Eligible Shareholder	means a Shareholder, as at 5.00pm (NZ time) on the Record Date, with
	a registered address in New Zealand, Australia or Fiji, who is not in the
	United States and not acting for the account or beneft of a person in the
	United States.
Entitlement	means the number of Rights to which Eligible Shareholders are entitled.
Existing Shares	means Shares on issue on the Record Date.
FMCA	means the Financial Markets Conduct Act 2013.
Ineligible Shareholders	means Shareholders of Arvida who are not Eligible Shareholders.
Investor Presentation	means the investor presentation released to NZX on 12 September 2017.
Issue Date	means the date of allotment of the New Shares expected to be
	13 October 2017.
Issue Price	means $1.15 per New Share.
Lead Manager	Forsyth Barr Limited.
Listing Rules	means the listing rules of the NZX Main Board, as amended from time to
	time and for so long as Arvida is listed by NZX.
New Share	means one Share in Arvida offered under the Offer of the same class as,
	and ranking equally in all respects with, Arvida’s quoted Existing Shares at
	the Issue Date.
NZX	means NZX Limited.
NZX Main Board	means the main board equity security market operated by NZX.
NZX Primary Market	means any company, frm, organisation, or corporation designated or
Participant	approved as a primary market participant from time to time by NZX.

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Offer	means the offer to subscribe for New Shares to Eligible Shareholders as at
	the Record Date, under the renounceable rights offer set out in this Offer
	Document.
Offer Document	means this document.
Opening Date	means 19 September 2017.
Premium	means the excess (if any) of the Clearing Price in the Bookbuild over the
	Issue Price.
Record Date	means 5.00pm on 20 September 2017.
Registrar	means Computershare Investor Services Limited.
Right	means the renounceable right to subscribe for 1 New Share for every 5
	Existing Shares held on the Record Date at the Issue Price, issued pursuant
	to the Offer.
Share	means one ordinary fully paid share in Arvida.
Shareholder	means a registered holder of Shares on Record Date.
Underwriter	means Forsyth Barr Group Limited.
Underwriting Agreement	means the agreement entered into between Arvida and the Underwriter
	dated 12 September 2017.

NOTE:

• All references to time are to New Zealand time.

• All references to currency are to New Zealand dollars.

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DIRECTORY

DIRECTORS OF ARVIDA	Peter Wilson (Chair)
GROUP LIMITED	Michael Ambrose
	Anthony Beverley
	Susan Paterson
	Paul Ridley-Smith
ISSUER	Arvida Group Limited
	39 Market Place
	Viaduct Basin
	Auckland 1010
	Phone +64 9 972 1180
	www.arvida.co.nz
LEGAL ADVISORS	Chapman Tripp
	Level 35, ANZ Centre
	23 Albert Street
	Auckland 1010
	Phone +64 9 357 9000
LEAD MANAGER AND UNDERWRITER	Forsyth Barr Limited (Lead Manager)
	Forsyth Barr Group Limited (Underwriter)
	Level 23
	Lumley Centre
	88 Shortland Street
	Auckland 1010
	Phone +64 9 368 0000

If you have any questions about the number of Rights shown on the Acceptance Form, or how to complete the Acceptance Form, please contact the Registrar at:

SHARE REGISTRAR	Computershare Investor Services Limited
	Level 2, 159 Hurstmere Road
	Takapuna
	Auckland 0622
	Private Bag 92119
	Victoria Street West
	Auckland 1142
	Phone +64 9 488 8777
	arvida@computershare.co.nz
	www.investorcentre.com/nz

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The attitude of living well.

P +64 9 972 1180 E info@arvida.co.nz

39 Market Place, Auckland 1010, New Zealand PO Box 90217, Victoria Street West Auckland 1142, New Zealand

www.arvida.co.nz