Keybridge Capital Limited announced an off-market takeover offer for Yowie Group at 3.4 cents per share. Keybridge has 35.5 per cent interest in the company and attempted a takeover in 2019.
Yowie Group issued a take no action notice to shareholders.
The offer price is a 17.24 per cent premium on the share price at close the day prior to the offer (28 December) and a 9.68 per cent premium on its one-month volume weighted average price up to that date.
Yowie Group says it’s an entertainment and education company with a conservation mission and message for endangered animals globally. The chocolate Yowies, with a surprise toy inside, are the vehicle for Yowie to introduce the brand and create awareness.
The group has had a turbulent past. Discontinued in 2005, it was relaunched in 2012 when a group of investors in Perth bought the rights from Kraft, saying the brand had unfulfilled global potential.
The revived group launched in the US in 2014 and in FY16 and 17, the business grew more than 50 per cent. In FY18, net sales in Australia increased by 44 per cent to $2.7 million.
Keybridge’s first take-over attempt was in May 2019, with a bid price of 9.2 cents per share, which Yowie Group said, “fundamentally undervalues Yowie's business, brand, intellectual property, and significant cash balance”.
Two months later, Yowie faced another takeover bid, this time by Aurora Dividend Income Trust (ADIT), which offered nine cents per share, a 16.8 per cent premium on its closing price of 7.7 cents. In 2015, Keybridge was Aurora’s largest shareholder and acquired Aurora’s funds management business, Aurora Funds, for $4.3 million. It sold that in the following year and by 2019 claimed it had no ownership interest in ADIT.
Meanwhile, the Australian Securities and Investment Commission (ASIC) appointed Morgan Stanley Wealth Management Australia to sell 28 million shares in Yowie Group (13 per cent of total capital), finding their purchase contravened the Corporations Act.
ASIC said Wilson Asset Management (International) (WAMI) had a relevant interest and voting power in 19.73 per cent of Yowie shares. It had a direct holding of 1.5 per cent and 18.23 per cent through its relevant interests in Keybridge Capital and HHY Fund.
Between 13-27 March, WAMI acquired shares that increased its voting power from 19.73 per cent to 32.17 per cent. Between 2-10 April, Keybridge acquired shares, which increased WAMI’s voting power to 32.65 per cent.
The Takeovers Panel determined it was unacceptable because they contravened s606 of the Corporations Act and WAMI contravened section 671B of the Act by failing to give details of its deemed relevant interest in Yowie shares.
After its unsuccessful takeover bid, Keybridge expressed concerns with the Yowie board and sought the removal of Yowie board directors Tim Kestell, Glen Watts and Louis Carroll. Keybridge didn’t provide a statement of reasons to shareholders on why the directors were to be removed and the resolution was not passed.
In its bidder’s current statement, Keybridge said it wanted to have greater influence over the future strategy and direction of Yowie. If it obtained a shareholding of less than 50 per cent, it would seek assurances its board representation was commensurate with its shareholding percentage.
In September last year, Yowie Group acquired Australia’s oldest chocolate house, Ernest Hillier for $375,000. Yowie bought its parent company, Chocolate and Confectionery Company (CCC), which went into voluntary administration in June.
