Could Centrepoint Alliance see proportional takeover interest?
Advice licensee Centrepoint Alliance could be more open to a proportional takeover bid after shareholders rejected a special resolution around takeover provisions.
At its annual general meeting on 14 November, shareholders voted on a special resolution regarding the renewal of proportional takeover provisions.
Under the Corporations Act, the provision is required to be renewed every three years and must be approved by 75 per cent of shareholders in a special resolution or it will cease to apply.
But the vote was rejected by 51.6 per cent of Centrepoint Alliance shareholders, meaning the provisions will cease rather than be renewed for another three years.
Without the provisions in place, this means a takeover bidder can gain a controlling interest through a partial takeover without needing the consent of the majority of shareholders.
In a statement to Money Management, chief executive John Shuttleworth, said: “This does not remove the protections under the Corporations Act—any takeover bid must still comply with the law, including the 20 per cent threshold and disclosure requirements. The change simply means that a proportional bid would no longer need an additional shareholder approval step.”
But Australian Wealth Advisors Group (AWAG) chairman, Lee Iafrate, which holds a 15.1 per cent stake in Centrepoint Alliance, said he welcomed the change and had voted against the provision at the AGM.
Speaking to Money Management, he said: “Anything that prevents corporate activity from taking place is not in the best interest of shareholders, shareholders should be able to decide what is in their best interest not the board This move gets the corporate process underway quicker and allows market forces to determine what is fair and reasonable value.
“A party could take a proportional stake initially then go onto take a full stake later. It enables an environment where corporate activity is heightened, not restricted.
He flagged that, unlike at other licensees, Shuttleworth does not sit on the Centrepoint board with all four board members being non-executive directors.
“AWAG has the utmost confidence in John and [chief financial officer] Brendon Glass and we are 100 per cent supportive of the job they have done. But it is a worry that John isn’t on the board, it feels like the board is being self-serving and maybe major shareholders don’t want to sit on an ineffective board.”
In its most-recent financial results, Centrepoint Alliance reported its net profit after tax was $5.1 million, down 33 per cent from $7.7 million a year ago. Net revenue (gross profit) was $40.9 million, an increase of 13 per cent.
Revenue from advice fees stood at $27.1 million, up from $24 million in the previous financial year, while revenue from salaried advice grew from $6.2 million to $8.5 million.
AUTHOR
Laura Dew
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