Multimillion-dollar bid for pirate funds on ice
A BAND of angry financial planners have managed to temporarily block a takeover of two Brisbane-based funds that are named after dead pirates and raised more than $50 million from investors.
An interim stop order impacting bids for funds Henry Morgan Ltd and Benjamin Hornigold Ltd has been made by federal body the Takeovers Panel, the stockmarket was told on Tuesday morning.
It followed an application to derail the bids from upset shareholders in the two funds, both named after pirates who raided in the Caribbean and died several centuries ago.
The Takeovers Panel said the interim stop order meant a freeze on processing acceptances in the takeover. This was to maintain the status quo and did not indicate whether an application would be successful, the panel said.
The order lasts for two months, but The Courier-Mail understands the panel generally decides matters earlier.
Henry Morgan Ltd and Benjamin Hornigold Ltd posted millions of dollars in losses last year and their shares are frozen on the stockmarket.
The funds are headed by Stuart McAuliffe, a former Bond University academic who cited the military campaigns of Roman general Julius Caesar and US general George Patton as inspirations for his investment strategies. The funds have paid millions of dollars in fees to their investment manager John Bridgeman Ltd, where Mr McAuliffe is also managing director.
And now John Bridgeman Ltd, which is listed on the little traded National Stock Exchange, is looking at acquiring the stock of both funds. The bid asks investors to swap their funds' shares for stakes in the investment management company, which does not appeal to some investors.
Angry shareholders have now sought to derail the bids, lodging objections with the Takeovers Panel.
Their grounds include that the content of bidders' and targets' statements breach parts of the Corporations Act. They also claim "there is no reasonable basis" for directors of the funds to have recommended accepting the takeover offers, which would see investors swap their funds' shares for stakes in the investment management company.
People behind the complaints include financial planners Jon Dixon from Bunbury in Western Australia, Gary Miller from Bribie Island and Tony Bennett from Sydney, according to Takeovers Panel documents and corporate searches.
All three men were among investors who tried to quiz the boards at recent firey annual general meetings that were dominated by the companies' top brass tightly restricting questions.
Complainants and Mr McAuliffe declined to comment to The Courier-Mail on Tuesday, citing the Takeovers Panel application.
Among those who have supported the takeover bids is Jenny Hutson, a well-known merchant banker behind Wellington Capital.
Wellington was an adviser to the floats of the investment management firm and Henry Morgan Ltd float, and has been a shareholder in the investment management firm and the Benjamin Hornigold Ltd fund. Ms Hutson, who is defending unrelated criminal charges related to a childcare takeover, also retained stock in the Benjamin Hornigold fund.
Several people associated with Ms Hutson, including two who worked for Wellington, have been involved in legal work on the bid or worked at the fund companies.
Ms Hutson and Mr McAuliffe told The Courier-Mail that Wellington's association with the funds now only extended as far as the shareholding. "She's (Ms Hutson) certainly not talking to me," Mr McAuliffe said.
Dominic McCormick, a portfolio manager with Select Investment Partners which did not take a stake in the funds' floats, recently wrote in sharemarket-industry publication LiveWire that "no easy options exist to resolve the mess that these three (pirate) vehicles have become".
"But accepting the (John Bridgeman Ltd) scrip hardly seems to be the answer," he said.