The smaller end of the takeover market is often the hardest fought.
The battle between Allan Fife’s Fife Funds, which has taken on Evans & Partners as a capital markets adviser, and its independent board committee, tended to by heavyweight UBS and boutique Fort Street, and Tony Pitt’s 360 Capital, which is being assisted by Moelis, is taking on larger proportions.
At issue are 360 Capital’s plans to merge its own industrial property trust and Fife’s Australian Industrial REIT. Already, Fife has rejected a merger offer, a takeover bid and an offer for its management rights. It also has the backing of independent expert KPMG.
Yesterday was 360 Capital’s turn to present its critique of Fife’s performance and, on its account, the dire risks of not accepting its mainly scrip bid in order to create an $800 million industrial fund.
360 Capital says its offer is a significant premium to its target’s performance and launched a hearty attack on Fife’s potential conflicts of interest. At issue is Fife’s purchase of a series of industrial assets worth more than $130m over the past 18 months for other industrial mandates.
360 Capital is asking pointedly why Fife’s listed fund missed out on the assets, which include the $50m Melbourne-based Elite portfolio and a $20m asset in Somerton, Victoria, over just the last four months. In the background, there are also rumblings for disgruntled vendors, like Warren Ebert’s Sentinel Property Group, about why Fife has not bought some assets.
Fife is happy to note that 360 Capital has won acceptances from just 1 per cent of his investors and warns of earnings and asset dilution if they take the bid.
This article first appeared in The Australian Business Review.