Chant West has fired legal action at previously agreed buyer and Zenith subsidiary CW Bidco in the NSW Supreme Court, after the company got cold feet and backed out of the sale.
Parent company Chant West Holdings signalled its superannuation research house has commenced the proceedings seeking an order for specific performance against CW Bidco, compelling it to complete the sale.
The two companies signed off on a business sale agreement on 18 February, entailing CW Bidco will buy Chant West for $12.5 million.
But CW Bidco indicated it would be reversing out of the deal last week in light of the coronavirus-shaken market conditions, telling Chant West it wanted to terminate the agreement on the basis that there was a “material adverse change” in the business.
Chant West rejected the claim, saying its financial condition and performance had not changed and it expects to continue on from its positive earnings in the first half of financial year 2020.
Further, Chant West Holdings has advised it has received interests from other parties for acquiring its financial advice technology provider, Enzumo.
The vast majority (99.2 per cent) of Chant West Holdings shareholders voted in favour of the sale to CW Bidco moving forward at its extraordinary general meeting last week.
The shareholders also backed a movement to change the company’s name.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].