dodgy takeover in the wings

Regent Street makes bid for Allco
Email Print Normal font Large font February 14, 2008 - 5:50PM

An unknown company calling itself Regent Street Instalments Pty Ltd says it has launched a takeover bid for investment firm Allco Equity Partners Ltd (AEP).

The company, which describes itself as a "shareholder activist", said in a media release that it is offering $261 million for AEP.

Regent said it is offer $2.70 per Allco share under its off-market bid.

"Consideration for this bid shall comprise 90-day commercial bills of exchange - drawn and accepted in accordance with the provisions of the Bills of Exchange Act 1909 - drawn in favour of accepting AEP shareholders and accepted by Regent Street" it said.

The contact for Regent Street was listed in the media release as Patrick Armstrong.

AAP telephoned Mr Armstrong to ask what was meant by the description of Regent Street as a "shareholder activist" and who was behind the company.

"Regent Street ...'Stephen Matthews' is executive director ... he is a ...um ... how can I explain what he does ... look, can I just give you a call back," Mr Armstrong said.

AEP is being contacted for a response.

Regent Street said in its statement that it would fund the bid through a "shareholder mandated approval of a share reduction".

It proposes AEP will pay to all AEP shareholders the sum of $2.90 per AEP share in late June 2008.

"AEP shall in turn fund the share reduction through the realisation of liquid securities ($1.46/AEP share at 31 December 2007) and the disposal of its interest in Signature Security Group ($1.54/AEP share at 31 December 2007)," it said in the statement distributed by the Medianet service.

Regent Street said its bid is conditional on a minimum aggregate acceptance condition of 50 per cent of AEP's issued ordinary capital.

There are at least two other conditions.

One is that the stated net tangible assets per AEP share not fall below $4.00 during the bid period.

The other is that AEP "contingent liabilities arising from financial accommodation it provides or proposes to provide to any AEP associate in the period subsequent from this announcement to the expiry of the bid period not exceed $50 million."

AEP shares closed at $2.30, up 28 cents, giving it a market value of $222.55 million.

According to the Australian Securities and Investments Commission (ASIC) website, a Stephen Lewis Matthews is described as publisher of The Chimes website.

ASIC in October 2000, obtained final injunctive orders in the Supreme Court of New South Wales against Stephen Lewis Matthews, restraining him from dealing in securities or giving investment advice, including any dealing or advice on the internet, unless he obtained licenses as required by law.

ASIC said in a statement dated October 4, 2000, that it had previously taken a number of actions against Stephen Lewis Matthews in both the Supreme and Federal Courts.

"Mr Matthews served three months in gaol earlier this year (2000) after he was convicted of contempt of court," it added.