It's a Thorney...

It's a Thorney issue:

http://www.theaustralian.com.au/business/call-for-asic-to-probe-failure-of-redflex-bid-a-shareholder-is-not-happy-that-100m-was-wiped-from-the-value/story-e6frg8zx-1226058514404

Call for ASIC to probe failure of Redflex bid: a shareholder is not happy that $100m was wiped from the value

EXCLUSIVE Damon Kitney From: The Australian May 19, 2011 12:00AM

A MAJOR shareholder in red-light camera company Redflex has called on the corporate regulator to review the circumstances surrounding the collapse of a $305 million takeover bid for the group from Macquarie Group and private equity firm Carlyle.

Alex Waislitz, whose Thorney Investments holds 7.6 per cent of Redflex, said the decision by shareholders last week to vote down a proposed scheme of arrangement at a lively meeting in Melbourne was "disappointing".

Macquarie Group and Carlyle were offering $2.75 a share for Redflex, after sweetening their offer at the 11th hour. But they won support from just 63.44 per cent of votes at the meeting, well short of the 75 per cent required.

Macquarie and Carlyle could not vote their 12 per cent stake.

Former Redflex chairman Chris Cooper, who was squeezed from the company's board in 2009 following a push by Thorney and other investors, had described the offer as inadequate and said he would vote against it.

Mr Cooper's wife, Elizabeth, controls 11 per cent of Redflex while Mr Cooper holds 35,000 shares in his own name.

Others on the Redflex share register who were expected to support Mr Cooper's view include ChengManOy and the Ho family's Investaco, which together hold about 11 per cent of the company.

"It seems to me that most of the professional and retail investors we spoke to were supportive of the bid and most probably would have accepted it in the absence of another bid," Mr Waislitz told The Australian.

"I think the issues that resulted in it not going to shareholders to vote on it will attract a bit of scrutiny in the next few weeks, to see whether the behaviour of those shareholders was appropriate."

Had investors approved the scheme, they were due to consider a second resolution for Redflex to provide financial assistance to Macquarie and Carlyle as part of their purchase. This was never put to shareholders.

Without the underpinning of the expected $2.75-a-share takeover bid, Reflex shares plummeted when they resumed trading last week. The stock fell 30 per cent in a single day's trading to $1.83, wiping $100m from the company's market capitalisation.

"The sharemarket has taken around $100m of value so I think Mrs Cooper, who is the main shareholder who rejected it, will I suspect come under a bit of scrutiny in one form or another," Mr Waislitz said.

Asked if he would push for the Australian Securities & Investments Commission to scrutinise the vote, he said: "Yes, absolutely.

"I think it is not out of the question that the regulator will be requested to look at it and they will, I suspect, be intrigued if they do.

"We are just a 7.5 per cent shareholder but I think there are a lot of people who have a vested interest to find out what went on behind the scenes and get clarity. When $100m is wiped out very quickly, that raises lots of questions."

Mr Cooper's opposition came despite Macquarie and Carlyle sweetening their offer to $2.75 a share with protection from currency fluctuations. Its previous offer, released in February, was valued at $2.70 a share but was pegged to the US dollar.

Mr Cooper had said ahead of the final offer: "It makes you wonder about the expertise behind the offer. I wouldn't agree to sell my car or my house without knowing what price I was going to pay for it."

Mr Cooper had also said that the right price for Redflex would have to have more than a "two in front of it".

But Mr Waislitz said the failure of the takeover bid provided a "great opportunity for the company to refocus on the opportunities they have got to improve the business".

The shares closed 2.6 per cent higher at $1.97 yesterday.