Shareholders sign off on IOOF MacarthurCook alliance
At an extraordinary general meeting today, MacarthurCook shareholders have “overwhelmingly endorsed” the strategic alliance between the company and IOOF Holdings.
IOOF has subscribed to 3.45 million shares in MacarthurCook, a 13 per cent stake in the business.
More than 94 per cent of MacarthurCook shareholders who voted in person or by proxy were in favour of the alliance.
As a result of the $4 million invested by IOOF through the placement, the borrowings of MacarthurCook have been reduced from 52 per cent of total assets to 35 per cent of total assets (as at June 2008).
During the shareholder meeting, MacarthurCook independent chairman Richard Haddock called the rejected June 2008 takeover proposal from AMP Capital Investors “indicative, incomplete and highly conditional”.
Haddock said that unlike the AMP offer, the IOOF proposal provided an investment in the group, allowing it to reduce its debt levels “in a market that will continue to weigh down upon debt laden companies”.
MacarthurCook’s strategy is to broaden distribution and increase funds under management by linking up with a large organisation that can promote its products while also reducing debt. Haddock said the alliance with IOOF will allow MacarthurCook to achieve its strategic goals.
The existing MacarthurCook Mortgage Fund will now be re-branded the IOOF MacarthurCook Mortgage Fund. MacarthurCook will become the preferred direct property partner of the IOOF Group and will assume management responsibility for IOOF’s direct property fund.
The group’s global expansion strategy includes a focus on launching and managing funds that are invested in Asian property markets.
During the meeting Haddock also referred to the group’s annual results, to be released later this year, saying the group’s profits will be “impacted by an impairment in the value of several of the company’s investments in MacarthurCook’s property funds, which have decreased in value”.
The group’s funds under management, however, “have remained at similar levels to last financial year, which is a quite reasonable result in the current climate”, Haddock said.
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