The corporate watchdog has weighed into the takeover tussle for Australian Unity Office Fund, urging the Takeovers Panel to investigate the conduct of the bidding consortium put together by Charter Hall and Abacus.
The Australian Securities and Investments Commission’s concerns centre on the acquisition and subsequent disposal of a 19.9 per cent stake in the Australian Unity-run fund by the consortium vehicle, which is known as CHAB, as it pursued the takeover.
“CHAB has intervened in the market for securities in AOF during the course of its proposed takeover of AOF in a way that undermines the integrity of the
trust scheme mechanism,” ASIC said in its submission to the Takeovers Panel.
The Panel is yet to decide whether it will conduct an investigation.
The ASIC complaint notes the consortium announced its acquisition of a 19.9 per cent at $2.95 per unit on June 4, the same day it lobbed a full takeover bid for the Australian Unity fund.
In July, CHAB increased its offer to $3.04, then struck a scheme agreement in September to take over the fund and its $670 million portfolio of nine office towers.
On October 31, the consortium divested its stake at the equivalent of $2.95 per share.
Although not mentioned in the ASIC complaint, the disposal was widely seen as a tactic by the consortium to increase the prospects of its bid receiving sufficient approval by shareholders. The consortium is prevented from voting on any stake it holds.
The proposed takeover has encountered resistance from another quarter as well with a major investor in the fund, the Scanlon family-backed Hume Partners, steadily increasing its stake to 11.4 per cent, a move which could potentially allow it to stymie the proposed takeover.
Approval for the mooted takeover requires 75 per cent support of those voting. The pool of prospective voters increases with CHAB’s sell-out, thereby diluting the relative size of Hume’s vote and its potential to thwart an approval.
The corporate watchdog claimed that if the takeover goes ahead not all the shareholders would “have had an equal opportunity to participate in the benefits offered under the scheme” given the “selective nature of the sale process” of the consortium’s stake.
ASIC wants the November 18 vote on the takeover adjourned. Failing that, if the takeover goes ahead, the watchdog wants CHAB to outlay further cash compensation for some shareholders.
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