Van Eyk Three Pillars rejects moves from Dixon

Van Eyk Three Pillars is urging shareholders to reject moves from financial services group Dixon Advisory to remove Three Pillars’ directors and appoint four Dixon executives to the board.

Three Pillars told shareholders it was not in their best interests to allow Dixon to take control of the board without Dixon paying a control premium or offering to buy out existing shareholders.

Earlier this month Dixon requested a general meeting of Three Pillars following a period of poor performance, during which the company had been trading at a discount to its net asset value (NTA). Apart from requesting changes to the board, Dixon, on behalf of more than 100 investors, also sought to implement an improved capital management plan and undertake a review to maximise shareholder value by closing the gap between the fair value of the company’s assets and its share plan.

Responding to the possibility of buy-backs of up to 25 per cent of its ordinary shares by Dixon, Three Pillars said there was “insufficient information” in Dixon’s proposal for shareholders to consider whether such a move would balance the trade-off between existing and outgoing shareholders.

Three Pillars also warned of increased uncertainty should Dixon’s challenge be approved, which could result in an increased discount to NTA.

Three Pillars said following a strategy meeting in late July, prior to Dixon’s proposal, the company was in a position to reinstate its dividend, deferred as a result of the financial crisis.

This is the second instance in recent months where Dixon has moved to take control of an executive board and potentially execute a share buy-back. In June this year, Dixon made a similar approach to Premium Investors.