Allegro busy with Toll plans

Sven Gard at Capral Aluminium. Picture: Mark Calleja

Australian private equity firm Allegro Funds appears to have plenty on its agenda as it closes in on the Toll Holdings Global Express unit and lobs a $118m bid for the aluminium company Capral.

Allegro is also moving forward with a float of Best & Less, which will ramp up next week with the hope of achieving a valuation of up to $400m.

Aluminium products manufacturer Capral, for which Allegro is offering $7 per share, was previously a major Australian listed company but is now a minnow, with the industry succumbing to imports.

The board is recommending the proposal.

But so far, expectations are that the Allegro bid will not get off the ground, with major shareholder Allan Gray Australia, which holds just under 20 per cent according to Bloomberg data, vigorously opposed to the proposal on the grounds that it grossly undervalues the company.

Capral is advised by Greenstone Partners and Mills Oakley, while Faraday Associates and Gilbert + Tobin are advising Allegro.

Meanwhile, Allegro has moved swiftly to hose down any suggestions that it would be putting Toll’s Global Express unit into administration after this week entering exclusive talks to the buy the business.

Sources in the market have suggested that Allegro’s plan for the loss-making Toll Express division is similar to its strategy for part of the Steinhoff International arm, where it put Harris Scarfe into administration soon after it was purchased and kept other more lucrative operations acquired from Steinhoff, which included Best & Less.

The understanding had been it would buy Toll’s loss making Global Express division, break the business up and put parts into administration to rid itself of challenging leases.

However, the understanding is that Allegro has given an undertaking that the business will remain intact.

DataRoom understands that the price offered for the unit is hundreds of millions of dollars, but this factors in liabilities.