Allco Equity Partners (AEP) IBA extract from article below:
It has started the new financial year on a more positive note, through a $324 million cornerstone investment in listed healthcare software provider, IBA Health Ltd.
AEP's investment is conditional on IBA executing a $410 million takeover of UK-based iSoft Plc.
If the IBA transaction goes as planned, Mr Derwin said AEP could still afford to make an acquisition with an enterprise value of $500 million by the first quarter of calendar 2008.
AEP shareholder rile against Allco deal
September 26, 2007 - 12:34PM
http://www.smh.com.au/news/Business...inst-Allco-deal/2007/09/26/1190486365920.html
Listed cash box Allco Equity Partners Ltd has come under fire from shareholders over its decision to sell a large stake of the company to close affiliate Allco Finance Group Ltd.
The transaction was approved by AEP shareholders at the group's annual general meeting in Sydney on Wednesday.
But unease over the deal was expressed by a large proportion of AEP's shareholders, including big institutional investor, AMP Ltd.
Since listing in December 2004, AEP has failed to execute a number of transactions, including a part tilt at Qantas, and its shares have fallen substantially.
AEP told shareholders that its deal-making prospects improved in July when it came under the management control of Allco, which invests in global transport and renewable energy infrastructure assets.
The shift in management control involved Allco paying an undisclosed sum for AEP's private management company.
Former Publishing and Broadcasting Ltd head and Macquarie banker, Peter Yates, who stood down as managing director of AEP in July, has declined to reveal how much he was paid for his 30 per cent interest in the management company.
Allco also wanted to lift its stake in AEP to 35 per cent at $5.00 a share, but needed shareholder approval for most of that purchase because AEP is publicly listed.
At the AGM, over 50 per cent of AEP's shareholders abstained from voting on the transaction, including AMP, which holds eight per cent of the group.
New AEP managing director Marcus Derwin told journalists that AMP abstained because it believed the transaction was "out of kilter" with the Australian Securities Exchange's corporate governance standards.
This came despite an independent report by Ernst & Young concluding the transaction was in shareholders' best interests.
"I'm not there to say what was the right price (for the deal)," he told journalists after the meeting.
"I actually see it in totality, and in totality, I think it was a fair and reasonable deal."
AEP chairman David Coe, who is also executive chairman of Allco, said the abstain vote was made "unusually high" because parties set to benefit from the transaction were not allowed to vote.
Mr Coe said the biggest of those shareholders, LJCB Investment Group, held about 20 million AEP shares. About 31 million shareholders voted in favour of the transaction, six million voted against, and 37 million abstained.
AEP was part of the failed $11 billion bid for Qantas and also failed in attempts to buy paint maker Wattyl Ltd and credit checker Veda Advantage Ltd.
It has started the new financial year on a more positive note, through a $324 million cornerstone investment in listed healthcare software provider, IBA Health Ltd.
AEP's investment is conditional on IBA executing a $410 million takeover of UK-based iSoft Plc.
If the IBA transaction goes as planned, Mr Derwin said AEP could still afford to make an acquisition with an enterprise value of $500 million by the first quarter of calendar 2008.
"Funds and borrowings are still obtainable for good transactions and for quality customers," he said.
Mr Coe said higher debt costs due to the global credit squeeze would reduce highly leveraged buyout activity.
But he said big private equity transactions worth up to $10 billion could still be pulled off, but only if players joined forces.
AEP shares, which were originally offered in 2004 at $6.00, closed one cent lower at $3.98 and Allco gained 10 cents to $8.67.
Mr Derwin said he believed that the underlying value of AEP's investments was not reflected in its share price.