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Magnolia has been given until 13 December 2020 to prove that it can pay up to proceed with its proposal to make a bid for The Agency Group, according to a new statement.
The Australian Government Takeovers Panel has revealed that it has now received an application from The Agency Group in relation to its affairs, namely the Magnolia proposal.
The Takeovers Panel iterated that as of yet, a sitting panel has not been appointed, and no decision has been made whether to conduct proceedings.
REB has previously revealed that The Agency Group did not consider the proposal from Magnolia to make a cash takeover bid for 100 per cent of the fully paid ordinary shares as either credible or legitimate.
In the latest statement, the Takeovers Panel said The Agency Group submitted that Magnolia has provided insufficient evidence of having funding or a reasonable basis to support its assertion that it would be able to perform its obligations related to the bid if a substantial proportion of the share payment offers under the bid were accepted.
By virtue of the existence of the Peters Proposal, The Agency Group also flagged that shareholders are, in effect, being asked to choose between the Peters Proposal and the bid: “It is therefore important that Magnolia provide The Agency Group shareholders with sufficient information about the bid, including in particular the source and availability of funding to effect the bid.”
The Agency Group submitted to the Takeovers Panel that a Ms Camilla Overgaard should have filed a substantial shareholder notice in May 2020 at the time she acquired all the issued shares in the ultimate controller of Magnolia (MC Investments [Aus] Pty Ltd), but has not done so.
In its application to the Takeovers Panel, The Agency said it was seeking a number of final orders that require the co-operation of Magnolia.
The first is that by no later than 13 December 2020, Magnolia provide both the Takeovers Panel and The Agency Group with evidence of its ability to pay the consideration under the bid, as well as its ability to repay, in full, The Agency Group’s existing Macquarie Bank facility.
The Agency Group also seeks an order that it be permitted to provide the evidence of the funding capability to its shareholders before the annual general meeting to be held on 23 December 2020.
Until the funding evidence is provided, The Agency Group seeks that Magnolia be prohibited from proceeding with its bid.
Where Magnolia is permitted to proceed with the bid, The Agency Group has requested that Magnolia include sufficient evidence regarding the ultimate source of the funds, the amount to be given by any lender and the security (if any) given for the funds in its bidder’s statement.
It also seeks a final order against Ms Overgaard, requesting that she immediately lodge a substantial shareholder notice.
UPDATE: REB received the following comment from Magnolia at 10:18am, Thursday, 10 December. It has been reproduced below in full:
Magnolia Equities III Pty Ltd (Magnolia) notes the announcement by The Agency Group Australia Ltd (AU1) released to the ASX on 8 December 2020.
AU1 identified a clear typographical error (the use of the word “scrip” in the heading as opposed to the word “cash”), which Magnolia accepts was included by mistake in its announcement of 4 December 2020. The consideration for the proposed Magnolia bid, as was clear from the body of Magnolia’s announcement, will be cash only.
Otherwise, the matters raised by AU1 in yesterday’s announcement are materially incorrect, incomplete and misleading.
Despite AU1’s allegation of no takeover, an application has been lodged by AU1 with the Australian Takeovers Panel (Application). Magnolia considers the Application is without merit. However, in accordance with the Takeovers Panel’s rules, Magnolia is unable to make any further comment on the Application at this stage.
Whilst the Australian Takeovers Panel is determining if they will elect a sitting panel and to conduct proceedings, Magnolia once again invites the Board to engage with Magnolia in connection with the proposed bid, so that Magnolia may address any concerns of the Board as they relate to the conditions outlined therein. Open dialogue with board members would be a welcomed change to that which Magnolia has received to date.
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ABOUT THE AUTHOR
Grace Ormsby
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.
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