John Bridgeman bid for Benjamin Hornigold fund failed

A controversial multimillion-dollar takeover bid for a Brisbane fund named after a dead pirate has been dumped.

A bid for pirate fund Benjamin Hornigold has been dropped.

A CONTROVERSIAL multimillion-dollar takeover bid for a Brisbane fund named after a dead pirate has been dumped.

An investment management firm, run by a former academic who partly based his trading strategies on the military tactics of Julius Caesar, executed a backflip on Tuesday by dropping the bid for a fund that he also ran.

It followed the Takeovers Panel this week detailing criticisms in a bid from investment manager John Bridgeman Ltd for the Benjamin Hornigold Ltd fund.

John Bridgeman Ltd had last year launched a bid for the Benjamin Hornigold Ltd fund and its sister investment fund Henry Morgan Ltd.

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Both funds have their stock frozen on the stockmarket and angry investors appealed to the Takeovers Panel, which determined the bids contained unacceptable circumstances.

Still, just on Monday night, NSX-listed John Bridgeman Ltd announced its plans to complete the takeovers were “scheduled to occur in April”.

Yet on Tuesday morning, John Bridgeman Ltd suddenly announced it would not proceed with Benjamin Hornigold Ltd bid.

The Takeovers Panel had ruled John Bridgeman Ltd, which posted a $16.7 million loss last year, would have to repay a controversial $4.5 million loan from Benjamin Hornigold Ltd by March. Sources with knowledge of the situation said the loan would still have to be repaid regardless of the bid being dropped.

The panel, in reasons released this week for detailing problems with the bid, noted that the Australian Securities and Investments Commission had raised concerns that the loan had “deprived” the investment fund of $4.5 million in cash.

“(It was) not wholly unreasonable for the panel to consider the prospect that the (bid) may have been contrived to avoid the need to repay the $4.5 million” that John Bridgeman Ltd owed to the investment fund, ASIC had said.

It is unclear if the bid would be renewed later. The second bid for Henry Morgan Ltd remains afoot as of Tuesday afternoon. Mr McAuliffe, who also runs both funds, has not returned queries.