A new off-market cash takeover bid could see 100 per cent of the fully paid ordinary shares of The Agency Group snapped up for 4 cents per share.
A letter to the ASX has revealed the off-market all scrip takeover bid by Magnolia Equities III Pty Limited, which sees the company intend to make a cash takeover bid for 100 per cent of the fully paid ordinary shares.
According to The Agency’s directors, the new bid provides network shareholders with a competing proposal to the Peters’ Proposal which was discussed at last month’s notice of AGM on 23 November.
Magnolia Equities III is a wholly owned subsidiary of Magnolia Capital, which is already The Agency’s largest shareholder.
Magnolia Capital is a provider of fixed income, equities and advisory products and services to high-net-worth and family office wholesale clients across Australia, Hong Kong and Singapore.
“The bid represents a premium to the high fair value estimated by Nexia Perth Corporate Finance Pty Ltd on a minority basis, if the Peters’ Proposal were to complete,” the statement said.
Magnolia said it was pleased to announce its intention to make the bid for all shares of The Agency, with each shareholder who does accept the bid to “receive no less than 4 cents per AU1 share”.
According to Magnolia’s founder and CIO, Mitchell Atkins, Magnolia has significant concerns as to the desirability of the Peters’ Proposal to all shareholders of The Agency.
He said that an independent expert — Nexia Perth Corporate Finance Pty Ltd — found the standing proposal to “be not fair, but reasonable because of the absence of other proposals”.
“Magnolia has sought to engage with The Agency’s board on several occasions to obtain information about the Peters’ Proposal and the current Macquarie Bank facility to ensure that the AGM materials provide a true, complete and accurate picture to shareholders, but has been rebuffed by The Agency board.”
Mr Atkins added again that Magnolia’s bid “provides a real alternative proposal to the Peters’ Proposal and we look forward to the revised report from the independent expert”.
Within the letter, he said “several of the conditions set out in the schedule to this announcement are directed to protecting Magnolia against any risk arising from the failure by The Agency to engage with Magnolia”.
“AU1’s board can ensure that the bid when made is less conditional by providing this material to Magnolia so that it can be satisfied that the relevant conditions would not be triggered.”
According to his letter, the bid, and Magnolia’s obligation to make the bid, is subject to a range of conditions, with lodgement of Magnolia’s bidder’s statement to be expected in late December 2020.
The bid is then expected to open in late January 2021, with Magnolia’s bid closing in late February or early March 2021, unless extended.
At the time of writing, the ASX has listed The Agency’s market capitalisation at $14.94 million.
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Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.