Advtech shareholders to take on board
by Marc Hasenfuss,
2015-07-28 06:29:00.0
AMID talk of other potential suitors for private education group Advtech, its annual general meeting (AGM) on Tuesday could provide clues as to whether an unsolicited R6bn takeover attempt by larger rival Curro Holdings has a chance of succeeding.
Advtech’s board has already rejected the advance by PSG-controlled Curro — which entails a shares and cash offer of R13 a share — as not in the best interests of the company. Some investors have cried foul at the decision by the Advtech board — which has raised technical questions about the validity of the approach — not to present the Curro offer to shareholders.
There is speculation that large Advtech shareholders, including Coronation Fund Managers and Kagiso Asset Managers that collectively hold about 35% of the company, could register their dissatisfaction at proceedings by voting against the reappointment of nonexecutive directors.
A source who asked not to be named said although the situation was "very fluid", it would be most surprising if a "protest vote" was not registered at the Advtech AGM.
"Shareholders don’t vote down the reappointment or appointment of directors very easily, but there’s probably some justification for shareholders who feel the board was not fulfilling its duty by referring the Curro offer to all shareholders."
The source said disgruntled Advtech shareholders did have other options to address issues with the board, including the calling of an extraordinary general meeting to consider every director in the company.
"But it’s unlikely they’d want to do that at this point. But not supporting the re-election of a nonexecutive director would send the clear message that if the board ignored a large body of shareholders the only remedy would be for shareholders to call for a replacement of those directors."
Representatives of Coronation and Kagiso felt it would not be appropriate to disclose their voting intentions before registering these at the AGM.
Kagiso investment analyst Simon Anderssen reiterated that the institution was unhappy that the Advtech board had not passed the Curro offer over to shareholders for a vote. "We think the offer is fair and that all shareholders should be given the opportunity to consider it. We would support the offer if put to a vote."
At the weekend Advtech CEO Frank Thompson said once the intricacies of Curro’s takeover tilt were known, it would not be surprising if other bidders for the company emerged.
Advtech had seen at least eight expressions of interest in the last six months, he said. "Some were more serious than others … and others more attractive than others. All in all we have seen interests from three local parties, three that could be considered hybrids of local and international players and three international players." Mr Thompson described Curro’s "firm conditional offer" as "an oxymoron not an offer" and stressed a deal would carry reputational, valuation and execution risk.
PSG Capital MD Johan Holtzhausen countered on Monday that the Curro offer was serious and that the company had the cash underpin to execute the proposed deal.
"We understood the Advtech board wanted a bigger cash underpin before they referred the matter to their shareholders. We therefore amended the offer on the basis that if major shareholders accept scrip — remembering that 50% have already indicated their preference for scrip directly or indirectly — that all other minorities could get cash."
Mr Holtzhausen said this was discussed with Advtech’s independent chairman. "It now transpires that they still do not want to refer the offer to shareholders. We do not want to get embroiled in a ping-pong match in the media, but believe certain statements cannot go unchecked nor can a party hide behind technicalities to try find a reason not to allow shareholders the opportunity to vote."
Advtech CEO Frank Thompson. Picture: ROBERT TSHABALALA
AMID talk of other potential suitors for private education group Advtech, its annual general meeting (AGM) on Tuesday could provide clues as to whether an unsolicited R6bn takeover attempt by larger rival Curro Holdings has a chance of succeeding.
Advtech’s board has already rejected the advance by PSG-controlled Curro — which entails a shares and cash offer of R13 a share — as not in the best interests of the company. Some investors have cried foul at the decision by the Advtech board — which has raised technical questions about the validity of the approach — not to present the Curro offer to shareholders.
There is speculation that large Advtech shareholders, including Coronation Fund Managers and Kagiso Asset Managers that collectively hold about 35% of the company, could register their dissatisfaction at proceedings by voting against the reappointment of nonexecutive directors.
A source who asked not to be named said although the situation was "very fluid", it would be most surprising if a "protest vote" was not registered at the Advtech AGM.
"Shareholders don’t vote down the reappointment or appointment of directors very easily, but there’s probably some justification for shareholders who feel the board was not fulfilling its duty by referring the Curro offer to all shareholders."
The source said disgruntled Advtech shareholders did have other options to address issues with the board, including the calling of an extraordinary general meeting to consider every director in the company.
"But it’s unlikely they’d want to do that at this point. But not supporting the re-election of a nonexecutive director would send the clear message that if the board ignored a large body of shareholders the only remedy would be for shareholders to call for a replacement of those directors."
Representatives of Coronation and Kagiso felt it would not be appropriate to disclose their voting intentions before registering these at the AGM.
Kagiso investment analyst Simon Anderssen reiterated that the institution was unhappy that the Advtech board had not passed the Curro offer over to shareholders for a vote. "We think the offer is fair and that all shareholders should be given the opportunity to consider it. We would support the offer if put to a vote."
At the weekend Advtech CEO Frank Thompson said once the intricacies of Curro’s takeover tilt were known, it would not be surprising if other bidders for the company emerged.
Advtech had seen at least eight expressions of interest in the last six months, he said. "Some were more serious than others … and others more attractive than others. All in all we have seen interests from three local parties, three that could be considered hybrids of local and international players and three international players." Mr Thompson described Curro’s "firm conditional offer" as "an oxymoron not an offer" and stressed a deal would carry reputational, valuation and execution risk.
PSG Capital MD Johan Holtzhausen countered on Monday that the Curro offer was serious and that the company had the cash underpin to execute the proposed deal.
"We understood the Advtech board wanted a bigger cash underpin before they referred the matter to their shareholders. We therefore amended the offer on the basis that if major shareholders accept scrip — remembering that 50% have already indicated their preference for scrip directly or indirectly — that all other minorities could get cash."
Mr Holtzhausen said this was discussed with Advtech’s independent chairman. "It now transpires that they still do not want to refer the offer to shareholders. We do not want to get embroiled in a ping-pong match in the media, but believe certain statements cannot go unchecked nor can a party hide behind technicalities to try find a reason not to allow shareholders the opportunity to vote."
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