Plans to convert investor’s wine scheme units into listed shares have been abandoned after strong opposition from the scheme’s investors around the country.
The manager of the wine scheme Cabonne is currently involved with the Central Highlands Wine Grape projects and has held six investors meetings’ around Australia to explain the deal, but received a frosty reception from investors in most capital cities.
Cabonne managing director Peter Poolman confirmed the offer had been postponed indefinitely.
“The offer is in abeyance until the board considers making another offer. The prospectus is registered for 13 months (from September 13), so there is an opportunity to resurrect the prospectus at a later date,” Poolman says.
The 8,000 investors in the three schemes were offered $500 cash and 3,250 Cabonne shares and the forgiveness of loans with the company’s associated finance house, C H Finance, for each unit.
Cabonne shares have traded between 26c and 87c during the past 12 months and have never touched their listing price of $1 in that period.
The share price last week hovered around 42c, which would make the deal worth just under $2,000 for investors, assuming they had no loans with the company. The total loans in the schemes amounted to $100 million. Cabonne would also acquire wine owned by the investors at market value.
The units were sold at $23,000 each and investors have paid anything up to $27,000 in management fees.
Poolman argues the offer reflects the potential share price in the future.
“Shares don’t have a life on them like the investment scheme and the offer allows investors to take part in any growth in the future. The current share price is not reflecting the performance of the company and that is because the market perceives it as a complicated company,” Poolman says.
He has argued that the structure of the company, a mixture of investors and shareholders, must change if the sharemarket is to understand how the company works.
“This offer is the result of meetings I had with investors in February when they asked me to come up with an offer. We have come back with an offer and people didn’t like it.”
Investors in the Central Highlands schemes have had some of their tax deductions denied by the ATO and Poolman says this is why feelings have been running high.
A meeting of investors was to have been held last Friday to vote on the offer, but Cabonne couldn’t get the required quorum, 25 per cent of the investors, to attend the meeting in Sydney.