Investment house 360 Capital has made clear that its intention in seeking to acquire wealth management group, Evans Dixon, is aimed at taking the business private.
In a letter to shareholders issued late yesterday, 360 has sought to explain why it has acquired 19.55% of Evans Dixon and why it has made a conditional offer to acquire the remaining shares with the intention of taking the business private.
It said it had been discussions with David Evans since August, last year, including privatising Evans Dixon but that Evans had been unwilling to engage with 360 with respect to the strategies.
“We believe that David and the ED1 team have built a broad and enviable platform which can be leveraged to take advantage of the significant opportunities in the financial services sector, particularly those relating to the stockbroking, corporate advisory, and wealth businesses,” the letter said.
The letter goes on to argue that Evans Dixon should be privatised because the move would give it greater flexibility to manage its capital base and, respond to opportunities and appropriately reward and incentivise staff while removing the complexities of its current public listing.
“Being listed on the Australian Securities Exchange (ASX) provides ED1 with limited benefits having regard to its historical trading history, relatively low liquidity, the complexity of its business, and the current challenges it faces including in connection with Australian Securities and Investments Commission (ASIC) proceedings,” it said.
The 360 letter said that, if its bid was successful, it would seek to ensure Evans Dixson staff and management remained highly aligned, including through ensuring staff enjoy a meaningful share of the profits that properly takes into account their contribution in the business.
