Confectionery company, Yowie, says its takeover bid of major shareholder, Keybridge Capital (KBC), is necessary because it had failed to repay at call money owed to Yowie, ongoing uncertainty with US tariffs, and working capital requirements.
There is a history of takeovers – attempted and otherwise – between KBC and Yowie over the last six years. KBC’s move in early 2024 was successful, with the company owning 78.4 per cent of Yowie’s holdings by May.
The Yowie board appointed Nicholas Bolton, KBC managing director, as the new Yowie CEO.
In February, Yowie called in its loan facility with KBC, requesting immediate repayment of $4.48 million of its loan. Keybridge went into voluntary administration three days later.
Yowie’s reciprocal loan agreement with Keybridge allowed Yowie to borrow up to $3.5 million or earn interest on deposited funds. Yowie said the loan was unsecured, callable, and has no set maturity date. On 30 December 2024, Yowie had $2.8 million on deposit, earning 10 per cent interest.
On Friday (9 May), Yowie told the ASX it was intending to make an off-market takeover bid for 100 per cent of Keybridge through a scrip takeover bid, with Yowie offering one Yowie share for each KBC share.
Bolton and Yowie chair, John Patton, have recused themselves from the approval process at Yowie in relation to the offer, because of their respective relationships with KBC and material economic interest in Aurora Funds Management.
In 2019, after a failed takeover bid by KBC, Aurora Dividend Income Trust (ADIT) made its move on the confectioner. In 2015, KBC 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. At the time, Patton was Aurora’s MD.
Meanwhile, after KBC went into voluntary administration, its shareholder, WAM Active, launched legal proceedings against it seeking to invalidate the appointment of a voluntary administrator.
In April, the New South Wales Supreme Court ruled that KBC was solvent because of funding promises from WAM. Yowie wasn’t involved in the action.
Last Thursday (8 May), KBC’s voluntary administrator was removed by WAM pursuant to s.447A of the Corporations Act, on the strength of WAM’s funding representations.
On Monday (12 May) Yowie received applications for and has resolved to issue 34,405,185 new shares in Yowie at 1.5 cents per share (a seven per cent premium to the last traded price of Yowie securities) under a private placement to wholesale investors raising $516,000.
Yowie said it has toys in a bonded US warehouse and was awaiting dispatch in China, which require the payment of US tariffs.
“In light of the failure of Keybridge meeting its obligations to repay at call money to Yowie (despite having entered and exited a Part 5.3A process under the Act), the significant ongoing uncertainty imposed on Yowie as a result of the US trade tariffs and taking into account its working capital requirements, the placement and the steps taken above are necessary to ensure stability for the company’s future,” the company said.
