Takeovers Panel orders G8 Education to sell shares in smaller rival Affinity after failed takeover

THE Takeovers Panel has ordered Gold Coast childcare operator G8 Education to sell shares it acquired in smaller rival Affinity Education as part of its failed hostile takeover bid.

Childcare operator G8 Education, the Gold Coast's largest listed company, held its annual general meeting at Southport Yacht Club today. Photo of Jenny Hutson. Pic by Richard Gosling

THE Takeovers Panel has ordered Gold Coast childcare operator G8 Education to sell shares it acquired in smaller rival Affinity Education as part of its failed hostile takeover bid.

The ruling came after the panel made a finding of unacceptable circumstances against G8 and its former chair Jenny Hutson in G8’s over the bid process for Affinity.

The panel found that three parties involved in the failed takeover bid had links with Ms Hutson, a breach of corporations law.

It yesterday ordered G8 to sell the shares it had acquired from the associates — Taxonomy, West Bridge and JB Super — in an on-market sale, with the process to be scrutinised by the Australian Securities and Investments Commission.

Withdrawal rights also must be offered to all Affinity shareholders who had accepted G8’s scrip bid.

G8 also has been given two days to disclose to the ASX the nature of its association with the three parties and detail the number of Affinity shares purchased and dates on which they were acquired.

The Takeovers Panel earlier this month found that Ms Hutson, who resigned as G8 chair on September 24 after leading the failed Affinity bid, had structural links, common investments and common dealings with each of the three parties.

The panel declined to make a costs order against G8. It said it will release its reasons for the decision “in due course”.

Ms Hutson, who officially resigned as G8 chair on Thursday, previously slammed the unacceptable circumstances finding as “wrong” and threatened G8 may launch an appeal.

She said there were “no agreements” between herself and the three parties.

‘That is the factual position. The panel has drawn inferences in relation to business dealings I had between nine and 20 years ago,” she said previously.

‘I think the decision is wrong and G8 has conducted itself in an entirely appropriate manner in relation to the takeover. The decision draws conclusions that in my view are not supported by the evidence”.

However, Ms Hutson yesterday declined to comment on the panel’s orders.

Meanwhile, managing director Chris Scott yesterday said G8 had this week completed the first round of interviews to recruit a chair to replace Ms Hutson.

He said G8 had interviewed “some serious players” who hold senior executive positions with major corporations.

Affinity shareholders next month will vote on a proposed $213 million takeover of the childcare operator by private equity firm Anchorage Capital Partners which is backed by Affinity’s board.

Anchorage chased off G8, which lobbed its first hostile takeover tilt for Affinity in July, by offering Affinity shareholders 92c a share, an improvement on G8’s 80c a share cash and scrip bid.

G8 Education shares closed 0.16 per cent higher at $2.95. Affinity shares closed 0.2 per cent higher at 90.2¢.