360 Capital could split up E&P Financial Group

The suitor has shrugged off a takeovers panel challenge and is pressing ahead with its plans.

Tony Pitt; CEO of 360 Capital, in their Sydney offices.

The battle for control of wealth management and advisory company E&P Financial Group, formerly known as Evans Dixon, is rolling on with suitor 360 Capital Group overcoming a takeovers panel challenge by agreeing to clarify the strict conditions of its bid for the $140m company.

The Tony Pitt-led predator has submitted fresh plans that highlight that its sweetened bid requires the target to deal with a case brought against its former Dixon Advisory arm by the Australian Securities & Investments Commission.

The condition, that appears unlikely to be easily satisfied, could leave the bid hamstrung, although 360 Capital insists it is already in talks with potential partners about a planned carve-up of the business.

Despite its fall from grace on the ASX, E&P is a prize and its wealth unit has about 9200 clients, representing $20.1bn in funds under advice. The E&P Capital unit is also a top adviser to corporate Australia and it also manages $6.7bn of funds.

The takeovers panel declined to conduct proceedings on an application from E&P after accepting an undertaking from 360 Capital Group to provide further disclosure in a supplementary bidder’s statement.

E&P went to the panel raising concerns regarding several conditions of the takeover bid announced by 360 Capital, including the Dixon action.

E&P is still fighting legal proceedings launched by ASIC against its Dixon Advisory and Superannuation Services Limited unit over how it sold clients into its struggling US property fund.

The court action launched in September exposes Dixon Advisory to tens of millions of dollars in penalties due to allegations it did not act in the best interest of clients.

The panel said the bid conditions were “not unreasonable” given that 360 Capital had not had access to due diligence but it had “significant concerns” about 360 Capital’s disclosure in relation to the ASIC proceedings.

The panel was concerned that the ASIC proceedings condition was not given prominence or discussed, and was only referenced in an annexure. But 360 Capital has now made the conditions clearer in a new bidder’s statement.

The condition requires that before the end of the 360 Capital offer period, the ASIC action and other similar proceedings, are withdrawn, discontinued or settled for no more than $10m.

360 Capital says if it wins full ownership of E&P, it intends to split the funds management division from the wealth and capital markets divisions.

Mr Pitt’s acquisitive listed funds house last month sweetened its takeover offer for E&P, putting pressure back on the embattled target.

He has pitched his near $160m bid as best for the underperforming company, arguing he can take it private and turn it around. He made an initial bid in October after building a 19.55 per cent stake in the company that was mainly bought from company co-founder Alan Dixon.