MacarthurCook managing director Craig Dunstan admits it will be harder defending the company against the AIMS Securities takeover in the current investment climate.
“If it was in 2006 with a market capitalisation of $100 million it would be easier,” he told Money Management.
In its defence document, lodged with the Australian Securities Exchange yesterday, MacarthurCook revealed the company’s performance has suffered during the economic downturn.
At the end of May, the company’s assets under management had fallen to $1.2 billion, compared to a peak of $1.5 billion at June 30 last year.
As a result, revenues have fallen from $24.2 million in June 2008 to an estimated $12 million for the 2009 financial year.
The share price also fell from $4.50 in January 2007 to 8 cents in January this year.
Dunstan argues there is further value in the company and shareholders are confirming that view by not selling.
“Sellers on the market today (June 30) are asking for 39 cents, which is above AIMS’ 35 cents offer,” he said.
“We are arguing their offer undervalues the company, and the shareholders agree.”
Dunstan said AIMS has been struggling to attract sellers at the offer price.
“This is a public company and the majority of our shareholders are saying the offer is undervaluing us,” he said.
As part of its defence against the bid, MacarthurCook is proposing to have a capital raising by October this year, but Dunstan said that is on hold at present due to the takeover offer.
“The capital raising was well advanced and we had talked to AIMS about it before they launched their bid,” he said.
“Because of the bid, we cannot undertake the capital raising until their offer closes on July 17.”
Dunstan said the company was also talking to managers in Australia and Asia about looking after their property portfolios, but this was on hold because of the bid, as is the agreement with IOOF for MacarthurCook to take over management of the former’s property mortgage fund.
“IOOF has told us they don’t want to proceed while the bid is on as they don’t know who will be running MacarthurCook in the near future,” he said.
“We understand their position.”
The MacarthurCook board has recommended shareholders reject the AIMS offer, saying it does not reflect the true value of the manager.
