A Quick Look at Keybridge Capital’s Off-market Takeover Bid for Yowie Group Ltd

April 29, 2019 02:48 PM AEST | By Team Kalkine Media
 A Quick Look at Keybridge Capital’s Off-market Takeover Bid for Yowie Group Ltd

An investment and financial services group, Keybridge Capital Limited (ASX: KBC) has a diversified portfolio of listed and unlisted investments/loan assets. As at 31st March 2019, the company’s unaudited after-tax Net Asset Backing was $0.0853 per share. The company recently made a conditional off-market takeover bid for all of the fully paid ordinary shares in Yowie Group Ltd (ASX: YOW) (Yowie) for a consideration of 9.2 cents per share, representing a significant premium to the volume weighted average price (VWAP) of Yowie Shares over the past one, two and three months. The company has already lodged its Bidder’s Statement with ASIC to acquire all the ordinary shares in Yowie Group Ltd. The company’s main purpose behind this offer is to protect the value of its investment in Yowie and to allow it to address the issues causing these losses within Yowie. Keybridge Capital became the large shareholder in Yowie in early 2018, and since then, it has been trying to engage with the Board of Yowie to address the matters that Keybridge feels have been and still are the cause of the operating losses (US$27 million since 1 July 2015) incurred by Yowie. However, these attempts have essentially been rebuffed by the Yowie Board. As per the off-market takeover bid, the offer consideration would be paid in either cash or a combination of cash and Keybridge’s listed Convertible Redeemable Promissory Notes. This is subject to the overall level of acceptances by Yowie Shareholders. Keybridge Capital believes that Yowie is a company that has systemic issues at the Board, management and operations level, which have led to a substantial loss in the shareholder value in recent years. This has manifested in the total comprehensive losses of A$27 million incurred since 1 July 2015 (when the Yowie Share price was $1.035). Although Yowie’s current Board has announced that they are seeking to deal with the issues that have caused these losses, after more than a year in the office, there does not seem to be a realistic prospect of Yowie becoming profitable in the near term. Yowie has suffered significant losses, which is accompanied by a calamitous share price decline from a closing price of $1.06 on 16 May 2016 to a closing price of 7 cents prior to the date of announcement of Keybridge’s takeover offer (on 13 March 2019). Keybridge has now determined to make this takeover offer in order to make changes at the Board, management and operational levels to address the issues causing these losses. In February 2019, the company completed a $3.6 million capital raising via the issue of 3,598,953 Convertible Redeemable Promissory Notes (ASX:KBCPA) (CRPNs) at a face value of $1.00 each to professional/institutional investors. The funds raised will be applied towards the investment capital base of Keybridge. As at 31st March 2019, the company had net assets of $13.440 million, which includes cash of $5.946 million. KBC currently holds 40,756,512 ordinary shares of Yowie Group, representing voting power of 18.717%. At the time of writing, i.e. on 29th April 2019 AEST 02:00 PM, the stock of the company is trading at a price of A$0.053, with a market capitalisation of ~A$8.82 million.


Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.


AU_advertise

Advertise your brand on Kalkine Media

Sponsored Articles


Investing Ideas

Previous Next
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.