Resimac and the Australian Mortgage Acquisition Company (AMAC) claim they will submit an application to the Takeovers Panel in order to stop rival bidders Pepper and Cadence Capital from gaining the upper hand as the battle over RHG continues.
As reported by Australian Broker, Pepper and Cadence raised the cash part of their bid to 36 cents per share, up from 35 cents, maintaining a scrip component of one share in Cadence for every ten in RHG. Cadence is currently RHG’s biggest shareholder, with 17.3% of the group’s stock.
Resimac wasn’t able to provide comment, but according to the Australian Financial Review, Resimack and AMAC believe Cadence Capital would stand to benefit at the expense of other RHG shareholders, should the Pepper bid be accepted. They believe Cadence is ‘conflicted’ and shouldn’t vote on the takeover, because the company would receive all cash under the rival bid structure, while other RHG shareholders will be made to take cash and script in a stock that is ‘thinly’ traded.
The Takeovers Panel is government-run a peer review body that regulates corporate control transactions in widely held Australian entities and is used to resolve takeover disputes.
Resimac reportedly wants the Panel to force Cadence to provide more clarity on the possible buyback of Cadence shares under its proposal.
They also argue that, because Cadence is a funds manager, the placement of Cadence stock to RHG shareholders would increase its funds under management and in turn increase fund management fees, claiming this would be undertaken without payment of any underwriting or capital raising fees.
Pepper was unable to comment in time for today's deadline.