Keybridge Not To Proceed With Yowie’s Conditional Off-Market Takeover Bid

  • May 06, 2019 AEST
  • Team Kalkine
Keybridge Not To Proceed With Yowie’s Conditional Off-Market Takeover Bid

On Thursday, 2 May 2019, Yowie Group Ltd (ASX: YOW) announced that Keybridge Capital Limited (ASX: KBC) would no longer be proceeding with its earlier announced conditional intention to make an off-market bid for all the fully paid shares in the YOW for a consideration of 9.2 cents per share.

On 1 May 2019, KBC had notified the market about its conditional off-market takeover bid for all the fully paid ordinary shares in YOW.

Yowie Group Ltd is a producer and marketer of chocolate products. Keybridge Capital Limited is involved with the work related to investments and financial services.

The reasons cited for not proceeding with the takeover plan are as follows:

  • YOW’s quarterly cash outflow from operation stood at $1,221k, which was significantly impacted by the operating loss.
  • There was a decline in operating revenue by 50% compared to its prior quarter’s outcome.
  • The cash position of the company dropped from US$18.751 million (as on January 2019) to US$16.982 million (as on 31 March 2019).
  • Keybridge Capital had made the minimum cash required to be of US$17 million for the bid to occur.
  • Yowie incurred cash outflows of US$1.787 million during the March 2019 quarter (compared to US$0.853 million cash outflows incurred during the pcp).
  • YOW Management has forecasted that its gross cash outflows for the next quarter (ending on 30 June 2019) would be US$4.025 million.

On 13 March 2019, KBC had announced that the takeover bid would be subject to a few terms and conditions related to the cash and liability balances of Yowie and no litigation, no material adverse change or statutory ‘prescribed occurrences’ taking place related to YOW before the end of the offer period. If any of the defeating conditions takes place before the lodgement of the Bidder’s Statement, Keybridge may choose not to proceed with the Bid.

Also, on 24 April 2019, KBC had mentioned that one of the conditions of the offer is that the Yowie Group's cash should not be less than US$17 million at any time during the Offer Period.

After the above-mentioned reasons were validated, KBC stated that the conditions had been breached. KBC has therefore decided to not proceed with the bid anymore. Keybridge will provide an update on the impact (if any) to the Bid for Yowie in due course.

On 30 April 2019, Yowie Group had provided an update setting its key priorities for FY2019 -20. It stated that they would return to an optimistic revenue growth trajectory. Progress on increasing US and Australian retail distribution would be carried forward. The company would also add new Yowie

confectionary products to broaden their horizon and brand footprint. It would also strive to improve the financial performance delivering positive EBITDA and cash flow during this year.

To achieve the goals, the group would execute the growth drivers to accelerate its progress graph in the competitive market. Retail activities and activations, Brand awareness and New products comprise of the driving factors.

The new product like new Yowie Collector Series would be released twice a year, simultaneously in the US and Australia markets. This strategy would broaden the company’s market reach whilst sticking to its purpose of educating children about the conservation of nature.

Share Price Information:

The stock of the Yowie last traded at a price of A$0.066 (as on 6 May 2019). While the stock of the Keybridge last traded flat at A$0.053 (as on 6 May 2019).


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