Financialplanning software providerIWLhas ended months of speculation by launching its much anticipated takeover bid for online broking group,Sanford.
IWL, which already owns 20 per cent of Sanford, will offer Sanford shareholders either one IWL share or $0.19 for each Sanford share in an unconditional bid to buy out the remainder of the group.
IWL chief executive Otto Buttula says the takeover was motivated by a desire to incorporate Sanford’s online broking service into its flagship financial planning software, Visiplan.
“This is not a purchase and burn strategy. We are trying to achieve synergistic benefits by amalgamating the two businesses,” he says.
Buttula says the offer, which is at a 31 per cent premium to Sanford’s current seven day average closing share price, is a fair one, even though it is below Sanford’s initial listing price.
However, the Sanford board has formed a committee to examine the bid and has recommended shareholders do nothing until it hands down its findings.
The committee will not include Buttula, who joined the Sanford board amid controversy last October, with a group of Sanford shareholders mounting an unsuccessful Supreme Court action to stop him taking up his seat.
The Sanford directors thought to be most opposed to Buttula’s presence on the board, Hadley Bodinner and Joe McKay, were voted off the Sanford board last December, paving the way for the IWL takeover.
IWL’s interest in Sanford also spelt the end of IWL’s planned merger with sharemarket information system provider Iress Market Technology, with both groups abandoning negotiations late last year.
Buttula says the IWL board decided the takeover of Sanford was a more attractive option than a merger with Iress.
If the takeover is successful, Sanford expects to offer positions to several of Sanford’s key executives, including a possible seat on the IWL board.
However, this is unlikely to include Sanford’s current chief executive Steven Goh, whose contract with the group runs out in March. Goh has been offered a consultancy with IWL, but not a full time role.
IWL’s offer to Sanford shareholders will close on March 21. IWL will fund the planned takeover through existing cash reserves.
