Nick Bolton leads Aurora Funds’ rival bid for Keybridge Capital

Aurora Funds, led by Nick Bolton, will make a rival offer for Keybridge Capital to stymie Wilson Asset Management’s takeover.

Keybridge Capital managing director Nicholas Bolton

Controversial corporate raider and Keybridge Capital managing director Nicholas Bolton is going head to head with veteran funds manager Geoff Wilson in an attempt to stymie Wilson Asset Management’s takeover attempt for Keybridge.

In a statement to the market on Wednesday, Aurora Funds Management — whose largest stakeholder is Mr Bolton — announced its intention to make a rival off-market takeover offer for Keybridge, through its Aurora Dividend Income Trust.

Aurora’s all-cash bid was priced at 6.6c per share, above the 6.5c per share offer lobbed by Wilson Asset Management in December.

Mr Bolton said the targeted fund was considering the offer in conjunction with WAM’s previous cash bid.

Shares in Keybridge have not traded on the ASX since it was suspended in July 2019, pending an ASX probe into its board composition.

Aurora said the offer would give shareholders the ability to sell out at 8.9 per cent premium to its most recent net tangible asset backing of 6.06c per share.

“The bid will strengthen Aurora Dividend Income Trust’s asset base and Aurora considers the bid price will provide ADIT with the potential for future capital growth,” Aurora said.

“Further, the opportunity to gain access to the franking credits within Keybridge would be valuable for ADIT unit holders.”

Aurora also said economies of scale would reduce management expense ratios for Keybridge following a deal.

“It is also reasonable to anticipate the potential for operating synergies over the medium term including in relation to administration and overhead expenses.”

WAM’s current offer is the third it has lobbed for Keybridge, following previous attempts in June and October 2019. It had initially announced its intention to lob a 6.9c per share bid last October, but trimmed that to 6.5c in December, citing a material decline in Keybridge’s net tangible assets.

Keybridge has a market capitalisation of about $12m and has engaged in a number of takeovers including a recent grab for listed chocolate-maker Yowie, which it walked away from in May 2019.

WAM holds a 20.4pc stake in Keybridge, while Mr Bolton holds a combined 24.83pc interest through his personal holdings and his holding company Australian Style Group. Aurora Funds Management was previously owned by Keybridge, which sold it in October 2016.