This article is from the Australian Property Journal archive
A FRUSTRATED 360 Capital has taken the extraordinary step of accusing Fife Capital of self-interest at the expense of investors and questions whether it is properly carrying out their fiduciary duties.
In a public letter, 360 Capital’s managing director Tony Pitt and independent chairman David van Aanholt questioned the independence of Australian Industrial REIT’s (ANI) independent board committee (IBC) as well as accuse Fife’s of self-interest by refusing to negotiate with 360 Capital Industrial Fund (TIX) and favouring the rival and inferior $2.40 bid from a consortium comprising Pivotal Fund and Redefine Properties.
“The IBC is handicapping the TIX offer in favour of the consortium by providing the consortium exclusive due diligence and contemplating a break fee. In contrast, the IBC has repeatedly refused to engage with TIX. The IBC should be acting in a fair and impartial manner, particularly given Fife has a personal interest in the success of the possible consortium offer.
“We have publicly questioned the independence of the IBC and whether they are properly carrying out their fiduciary duties.
“We have not made these claims lightly as we understand the severity of these claims, however the manner in which the IBC is now dealing with the TIX offer and the possible consortium offer only heightens our concerns,” they said.
ANI’s independent expert KPMG has concluded that TIX’s revised offer of $2.47 is fair and reasonable in the absence of a superior offer and the Redefine/Pivotal Fund offer does not represent a superior proposal and contains a high degree of uncertainty.
“Even though the independent expert has concluded that the TIX Offer is fair and reasonable and superior to the possible consortium Offer, the IBC continues to favour the consortium which has agreed to retain Fife as manager on an ongoing basis and discriminate against TIX which has not agreed to retain Fife. This conduct is unacceptable.
“It has been a source of frustration and disappointment that Fife and the IBC has repeatedly refused to engage with TIX in relation to the TIX offer in order to secure an optimal outcome for its unitholders,” they lamented.
Pitt and van Aanholt said to maximise returns for ANI unitholders, the IBC should provide a level playing field to both TIX and the consortium and seek to solicit the best offer.
“It should be for ANI unitholders to decide which direction they wish to take in relation to their ANI units.
“…it is entirely inappropriate for the IBC to favour the consortium over TIX in the current circumstances, particularly where such favouritism is likely to have the effect of benefiting Fife in its personal capacity at the expense of ANI unitholders,” they added.
At the same time, Pitt and van Aanholt have made a stand and will not accept Redefine/Pivotal Funds’ offer.
“TIX owns over 36% of ANI and based on the limited information available, TIX will not accept the consortium’s proposal if it were to materialise into a bid capable of acceptance.
Meanwhile Pitt and van Aanholt have threatened to take legal action against Fife Capital and the IBC.
“We will continue to monitor the actions and decisions of each director of Fife Capital Funds Limited, especially the role of the IBC.
“If required we will take whatever action is necessary, including legal action against ANI directors in their personal capacity and Fife Capital Funds Limited to recover any inappropriately deployed funds of ANI,” they warned.
Australian Property Journal
