The shape of takeover target Kresta Holdings' shareholder register continues to change, with fund manager Perpetual the latest major investor to reveal its activity in the stock over recent months.
The shape of takeover target Kresta Holdings’ shareholder register continues to change, with fund manager Perpetual the latest major investor to reveal its activity in the stock over recent months.
Perpetual, which has reportedly opposed a bid for Kresta by former chairman Ian Trahar, has emerged as Kresta’s third biggest shareholder after increasing its stake to 7.2 per cent through about 25 purchases since June which were previously undisclosed.
Mr Trahar and his key opponent Hunter Hall both hold just below 20 per cent of the stock. That makes the size of other key stakes in the business, and their owners’ voting intentions, potentially critical to the outcome of both a boardroom spill and the takeover bid.
It has been more than a year since Perpetual’s last disclosure when it told the market it had dropped below 11 per cent to hold 6.18 per cent of Kresta, although keen observers would have discovered in the 2010 annual report top 20 shareholder list that the fund manager had sold down further, to 5.76 per cent.
Apart from a couple of transactions which appear to be between entities controlled by Perpetual, all of the activity since June 17 has been in teh form of purchases at prices ranging from as low as 22 cents to as high as 37 cents.
In fact, the Perpetual announcement today shows that far from selling down before the annual report’s cut off date of September 22, the fund manager had actually grown its stake to 6.7 per cent. The apparent error in the annual report appears to have partly resulted from undisclosed transactions between entities controlled by Perpetual, with some sales being noted by Kresta’s accounts but not the corresponding purchases.
Perpetual was not the only one revealing its full holdings lately, although other major stakeholders have clearly pushed beyond the legal boundaries. For instance, Kresta’s major supplier Taiwan-based Si Chuan Cheou admitted last week to failing to lodge substantial shareholder notices with the company for the past 11 years.
Mr Cheou holds just over 7 per cent, having sold down from 9.19 per cent, apparently to another major stakeholder, fund manager Hunter Hall. Mr Cheou did not mention up to another 4 per cent of Kresta which sources close to the group believe is held by his associates.
Hunter Hall also failed to disclose the purchase of more than 4.26 million shares, or almost 3 per cent of the company, for two months.
Mr Cheou and Hunter Hall alerted the market to their corrections. Mr Cheou apologised for his inadvertent failure to understand Australian listing rules while Hunter Hall stated it was an administrative oversight.
It is understood that substantial interests have to increase or decrease by at least 1 percentage point to be disclosable, which means the transactions on February 11 and February 14 most likely pushed Perpetual past the threshhold for a notice to be lodged.
Late last year, after a falling out over voting at Kresta’s annual meeting, Hunter Hall sought to have Mr Trahar, then chairman, and its own board nominee Peter Hatfull removed as directors at an extraordinary general meeting scheduled for Monday this week.
Mr Trahar launched a bid in January at 32.5 cents, valuing it at about $47 million, but conditional on efforts to remove him and Mr Hatfull from the board failing. Mr Trahar also stepped down as chairman but remains on the board.
Last week, Kresta went to court to force the delay of the EGM for four weeks so shareholders could properly assess the bid, including an independent experts report due to be published in the next few days.
