Alex Waislitz fights ‘too cheap’ Credible bid

Billionaire investor Alex Waislitz says he is talking to other investors in Credible Labs to block a takeover of the fintech.

Investor Alex Waislitz. Picture: Aaron Francis

Billionaire investor Alex Waislitz says he is in negotiations with other “significant” investors in fintech takeover target Credible Labs about options to block a proposed $585m takeover bid from Fox Corporation.

Credible Labs chief executive Stephen Dash said in August that Fox Corp’s $2.21-a-share takeover bid was being made at a “compelling price” and claimed Credible would be forced to raise more dilutionary capital from investors to fund its emerging US mortgages business if the deal did not proceed.

But Mr Waislitz, whose listed Thorney Technologies holds just under 4 per cent of Credible, has questioned the deal, saying the offer price of $2.21 is “too cheap” for the fintech, which helps consumers shop for loans for mortgages and education from financial institutions.

In his latest chairman’s update to Thorney investors, Mr Waislitz reiterated that he felt the offer price did not represent a sufficient takeover premium given Credible’s potential.

As part of the deal Fox will also inject $US75m ($110m) into Credible, which was the biggest technology IPO on the ASX in 2017 and which counts industry super fund giant Hostplus, Aussie Home Loans founder John Symond and former Seven executive Peter Gammell among its backers.

“While the price offered by Fox is $1 per share higher than CRD’s IPO listing price of $1.20, I would rather see a significantly higher offer price for CRD or an issue of shares to Fox which would have enabled all CRD existing shareholders to participate in CRD’s future growth upside rather than just the company’s founder Stephen Dash and the Fox Corporation,’’ Mr Waislitz said in his chairman’s update.

“We have been contacted by a number of other significant CRD investors who feel the same way that we do and we are currently considering various options available to us.”

Under the Fox deal Mr Dash will be paid $55.25m for part of his 44.7 per cent stake in Credible and be left with a 33 per cent shareholding in the merged group, worth about $195m.

While he will be unable to vote his stake in the second and most important of two shareholder votes to approve the takeover by Fox, under Delaware law where Credible is domiciled, only a simple majority (50 per cent) of shareholders is required to support the deal for it to proceed.

There is speculation more than 15 per cent of the share register is now held by hedge funds. US fintech company valuations have fallen by more than 20 per cent in the past three months.

Other long-term shareholders including Regal, Carthona and Alceon Group have welcomed the transaction, which Credible has recommended to its shareholders.

Fox Corp and The Australian’s parent News Corp share common ownership.

In his chairman’s update for Thorney, whose net tangible assets per share rose almost 23 per cent to 30.7c a share last financial year, Mr Waislitz talked up the company’s investments in private companies that could crystallise wealth for investors by floating on the ASX.

“In the next six months or so we believe a number of companies that we have been involved with at the pre-IPO stage are expected to finalise their decisions on proceeding to an IPO and subsequent ASX listing,’’ he said, singling out carbon wheel-maker Carbon Revolution, ag-tech Terragen, LNG trading platform GLX, softwear-as-a-service group Nitro and Credit Clear, a fintech which helps facilitate easier payment of overdue accounts.

“If some or all of these companies proceed to listing it will be a good opportunity for us to assess not only our own performance as a pre-IPO investor, but also to highlight to our own investors the unique exposure that they have to both public and private companies at every stage of the business life cycle when they invest in TEK,’’ Mr Waislitz said.

Mr Waislitz said last week in his chairman’s letter for his other listed entity, Thorney Opportunities, that some technology companies were reaching arguably extreme valuations when measured against traditional metrics.

“While we are also participating in many of these companies, particularly in Thorney Tech, we are seeing the emergence of great value in the small to mid cap, non-technology-related sector of the market,’’ the billionaire said.

He also noted that private equity groups were “flush with funds and emerging as buyers of listed equities”.