Mariner Corporation has advised the board of Austock Group that it intends to make an offer to Austock shareholders to acquire their shares.
In a letter to the Australian Securities Exchange yesterday, the listed corporate investment firm said it would offer 10.5 cents per share, subject to 50 per cent acceptance of the offer.
The letter, issued by the Mariner board, outlined three key points as to why Austock shareholders would be interested in the offer.
"The offer price represents a 5 per cent premium to Austock's current trading price and its one-month rolling VWAP (volume-weighted average price), each being 10 cents per share at the time of our bid," the letter said.
"There is a limited volume in Austock shares, so this may [be] the best opportunity for shareholders to sell any large parcel of Austock shares for some time.
"Austock shareholders will have cash certainty for their shares now, rather than wait with uncertainty to see what the board of Austock will do with the company now that the broking business has been sold."
As well as approaching shareholders directly, Mariner intended to purchase up to 20 per cent of the issued capital on-market at 10.5 cents per share "to enable Austock shareholders to sell now", the company said.
Mariner said it expected to lodge a bidder's statement with ASIC and issue the statement to Austock shareholders in accordance with the Corporations Act.
Mariner chief executive Darren Olney-Fraser was unable to make any further comment when contacted by InvestorDaily.
For Austock Group, the offer comes at a time of rebuilding for the company.
Earlier this month, the Austock board said it had begun cost-cutting measures at the group level.
The listed funds management group said "significant" savings had been identified and action taken.
"Subsequent to the sale of the securities business, the new board and management have focused their attention on the reduction of costs at group level," the company said at the time.
"The board and management are now turning their attention to Austock's strategic direction."
Austock finalised the sale of its securities business to Intersuisse Holdings in March.
Costs associated with the sale, in particular the combination of the restructuring costs and further trading losses, were likely to result in a full-year net loss after tax of between $15 million and $16 million, the company said.
Austock's core business now rests with its $850-million funds management units: Austock Services, Austock Property and Austock Life.
Mariner's takeover offer comes as the company continues to execute a number of strategic transactions.
In the past six months, the company has sold its interest in Viento Group, undertaken a transaction with Guinness Peat Group, and acquired 20 per cent of Becton Property Group.
