This article is from the Australian Property Journal archive
TONY Pitt’s 360 Capital has made a takeover bid for Evans Dixon, hoping shareholders of the embattled wealth manager will jump at chance to exit their investment before further developments in an ASIC court case.
Two months after taking a stake of nearly 17% – which has since grown to nearly 20% – 360 Capital (TGP) is looking to acquire the remaining shares for $0.40 per share, plus one TGP stapled security for every four Evans Dixon shares.
The offer price is valued at $0.61 per share, lobbed at a 142% premium to the company’s net tangible assets, a 35% premium to the average price in which TPG purchased its last portion of its 19.55% stake about six weeks ago, and a 54% premium to the trading price shortly after the company disclosed ASIC was taking corporate action against Dixon Advisory and Superannuation Services Limited (Dixon Advisory), a subsidiary of the company.
The trading price of Evans Dixon – formed from a merger of Evans & Partners and Dixon Advisory – has plummeted by 79% since the company’s IPO in May of 2018. Its share price jumped yesterday to close 7.8% higher at 62c.
“360 Capital believes that the Offer represents a compelling opportunity for the ED1 shareholders to exit their investment before any further value destruction, including arising as a result of the ongoing ASIC proceedings against Dixon Advisory,” 360 Capital said.
ASIC launched action against Dixon Advisory in the Federal Court in September, alleging it failed to act in clients’ best interests when advising clients to invest in the ASX-listed US Masters Residential Property Fund between September 2015 and May 2019.
The fund (URF) has been under scrutiny due to concerns about the sustainability of its dividends, as its interest costs were outpacing rental income. It posted a near-$38 million full year loss after $48 million was wiped off the value of its residential properties in New York and New Jersey.
