Keybridge rejects WAM’s $11m bid

Investment group Keybridge Capital has rejected WAM Active’s $11m takeover bid, saying a higher offer is already on the table.

Nicholas Bolton.

Investment group Keybridge Capital has rejected WAM Active’s $11m takeover bid, saying a higher offer is already on the table.

Shares in Keybridge, part of chief executive Nicholas Bolton’s complex web of companies, have been suspended since July last year pending the outcome of inquiries into a number of issues raised by the full-year accounts.

The company is holding its annual meeting in Melbourne on Tuesday as a three-way tussle for control intensifies.

The combatants include Mr Bolton, who has a 5 per cent stake, fund manager Geoff Wilson’s and WAM Active with 23 per cent, and Farooq Khan’s Bentley Capital with 20 per cent.

WAM Active declined to comment ahead of the meeting.

However, Mr Wilson alone has the muscle to force a second strike on the Keybridge remuneration report, which requires a 25 per cent “no” vote.

A board spill could then be triggered.

The Keybridge target’s statement, released on Monday, said a majority of directors had rejected the 6.5c-a-share WAM Active offer because Aurora Dividend Income Trust had made a higher offer at 6.6c a share in cash.

Aurora is also associated with Mr Bolton.

While Mr Bolton would not comment on the likely outcome of shareholder resolutions, he said it made no sense for any shareholder to accept WAM Active’s bid when a higher offer was on the table.

“The fact that three very experienced investors have spent so much time, energy and money fighting over a relatively small company says a lot about our value,” he said.

“As with all shareholder meetings, every vote counts.

“I strongly encourage shareholders to have a say on how their company is run.”

The target’s statement also said the WAM Active offer was conditional on many factors, including majority shareholder acceptance and the absence of any higher offer.

This condition had already been breached due to ADIT’s higher offer.

The statement also said the WAM Active offer undervalued Keybridge’s assets, including its property in Manly, Sydney.

Last June, Keybridge said it had rejected an offer for the property that was $2m higher than its book value.

“If this asset were to be realised at the most recent cash bid price, rather than the carried valuation, the WAM Active bid would be below the company’s pro-forma net tangible assets,” the target’s statement said.

Shares in Keybridge have not traded on the ASX since it was suspended in July 2019, pending an ASX probe into its board composition. WAM’s current offer is the third it has lobbed for Keybridge, following attempts in June and October 2019.