- The Agency Group (AU1) has today responded to the ongoing takeover proposal by Magnolia Equities
- The proposed takeover comes as an alternative to a funding deal signed by AU1 with private company Peters Investments last month
- The Australian Takeovers Panel recently released interim orders requiring The Agency Groups’ financial consultant Nexia respond to Magnolias comments before voting on whether the Peters deal could go ahead
- Today, Nexia released a statement confirming its previous findings
- Subsequently, an annual general meeting has been scheduled for January 4 in Perth
- AU1 shares ended the day unchanged at 5.1 cents
Embattled real estate services company The Agency Group Australia (AU1) has updated the market in response to a proposed takeover bid by potential suitor Magnolia Equities.
The intended takeover saga started on December 4 when AU1 received a letter from Magnolia setting out a “proposal to make an unsolicited, conditional offer” to purchase all of the fully paid ordinary shares in The Agency. Magnolia is believed to be associated with ex-director and significant shareholder of AU1, Mitchell Atkins.
AU1 raised doubts at the time as to the validity of the proposal, questioning whether Magnolia had the backing to secure the required funds and pointing out “conflicting and confusing statements” contained in the letter. AU1 also contended the bid price of 4 cents per share didn’t represent fair value for shareholders.
The proposal to launch a takeover bid came after The Agency Group secured a deal for vital funding from the privately-owned Peters Investments. AU1 then engaged financial consulting business Nexia to prepare an Independent Expert Report (IER) on the potential Peters Investments deal.
The dispute escalates
With the dispute escalating between AU1 and Magnolia, applications were lodged by both sides to the Australian Takeovers Panel. Last week, the panel released interim orders recommending AU1 delay voting on the Peters proposal until such time Nexia responds to comments made by Magnolia.
Nexia released a statement today responding to the comments. As such, the annual general meeting has now been scheduled for January 4 in Perth.
Meanwhile, a loan agreement between AU1 and Macquarie Bank (MQG) remains clouded. A December 30 deadline for a deed of forbearance granted by Macquarie is imminent, with no further updates available at this time.
AU1 shares are unchanged today, closing at 5.1 cents