Pitt lays out plans for Evans Dixon privatisation

Takeover plans for the blue blood stockbroker have been afoot for more than a year, according to raider 360 Capital.

Tony Pitt; CEO of 360 Capital: Takeover plans for the blue blood stockbroker have been afoot for more than a year, according to raider 360 Capital.

The battle lines are sharpening in the contest for troubled financial services company Evans Dixon with corporate raider Tony Pitt holding out an olive branch to staff who have suffered heavy losses on their shareholdings.

The funds manager is pitching himself as the one to take the underperforming firm private and turn it around and also revealed he had made approaches to privatise the company last year.

The moves had not been previously disclosed to the ASX although his attempts to take control of the company‘s struggling US property fund, alongside with US manager Oaktree, have been made public.

In a letter to “fellow” shareholders — 360 Capital has built up a 19.55 per cent interest in the company — Mr Pitt laid out the rationale for the takeover.

He revealed 360 Capital had been in talks with Evans Dixon chair David Evans since August 2019 “regarding various strategies to maximise the value of ED1 and the funds it manages”.

He laid out the rebuffing of his offers writing that the plans, which “included privatising ED1”, had met with resistance, as “David was unwilling to engage with us on these strategies”.

Mr Pitt has thrown open lines to Evans Dixon’s army of corporate and financial advisers writing he is “happy to discuss any part of 360 Capital’s proposal” with them.

The unconventional move could splinter the firm between those keen to explore his proposal and those wedded to rejecting his approach.

Mr Pitt acknowledged that the firm’s staff and associates, who dominate the register, had lost “significant amounts of capital” as shareholders.

But he argued that 360 Capital was “strongly aligned” with staff, “both in its desire to restore shareholder value and its appreciation that the future success of ED1 is dependent upon it having a highly aligned and motivated workforce“.

Mr Pitt said the Evan Dixon platform could be “leveraged” to take advantage of “significant opportunities” in the financial services, particularly in stockbroking, corporate advisory, advice and wealth businesses.

He cited the spurt of consolidation and privatisation activity in the sector as highlighting the opportunities and envisages that Evan Dixon could become a consolidator.

“ED1’s business should be a leader in this consolidation due to the high quality nature of the business,” his letter said.

Mr Pitt claimed 360 Capital’s recent efforts to re-engage with Mr Evans and the board to take the company private had also been rebuffed. “To date, the board has not engaged with 360 Capital in connection with a privatisation,” the letter said.

This has prompted the call to staff, saying a private company would be more flexible and being listed held few benefits after the share price crash and as it also faced ASIC proceedings.

360 Capital pointed to its successful track record as a funds manager and in taking over companies.

The initial point of conflict could come at the firm’s AGM next week, where Evans Dixon, which had invited Mr Pitt on to its board, is now opposing his election.

The incumbent board withdrew its support for Mr Pitt, citing 360 Capital‘s takeover play for the company.

Mr Pitt owns 29.4 per cent of 360 Capital and the board said it would be “inappropriate” to recommend his appointment while the takeover was on foot.

Evans Dixon is also standing by a plan to issue options and rights to staff that Mr Pitt had warned may entrench their control.