ASX-listed Yowie Group Ltd has advised shareholders to "take no action" following the intended off-market all scrip takeover offer by Aurora Dividend Income Trust (ADIT).
ADIT offered 9 cents per share, a 16.8 per cent premium on the company's most recent closing price of 7.7 cents.
Aurora managing director John Patton told Food & Drink Business at press time, "The Yowie business, under the stewardship of the current Board, has continued to dwindle and does not appear to have a clear strategy to turn around its performance."
In March Keybridge Capital Ltd made a similar bid, also rejected by Yowie. Keybridge had connections to ADIT in that it acquired its funds management business – Aurora Funds Ltd – for $4.3 million in 2015. At the time Keybridge was Aurora's largest shareholder. Keybridge sold its funds management business in 2016. Patton told F&DB that Keybridge no longer has any ownership interest in Aurora.
Aurora's ASX announcement says it held “significant concerns” on the “financial performance, leadership and corporate governance” of Yowie for “some time”.
"The latest quarterly report released by YOW on 30 April 2019, for the quarter ended 31 March 2019, clearly demonstrated that YOW management are no closer to turning around the business, with deteriorating sales performance and a net cash outflow of US$1.787 million," it says.
The directors of Aurora believe that decisive action is required to address the issues within the YOW business.
It was also “surprised and alarmed” by the appointment of a new director to Yowie’s board following the Keybridge bid. Neon Capital executive Tim Kestell had “no discernible experience in the YOW business nor a substantial shareholding,” Aurora says. Kestell was appointed on 17 May 2019.
Patton told F&DB: "Mr Kestell does not have a significant shareholding in the company and, with his mining background, does not appear to possess the requisite experience for a company such as Yowie."
FD&B approached Kestell and Yowie for comment but neither responded by press time.
Previous F&DB stories:
- Australian sales boost global profits: 11 July 2018
- Company profile: May 2018 issue
- Yowie expands US footprint: 12 April 2018
- Second series launch in Australia: 21 February 2018
