Over Fifty Group (OFG) director John McBain has denied he is attempting to block a possible company sale by taking the financial services group to court.
McBain, who owns 12 per cent of the listed group and managers the group’s property arm, Century Funds Management, said he does not intend to stand in the path of potential sales, but believes the company requires a board reshuffle to properly benefit from any transaction.
To date there are 30 rumoured indicative bids for OFG.
McBain suggested increasing the number of OFG board members to nine.
This was rejected by the board, and McBain found himself shut out of the company’s strategic review process.
According to an affidavit filed to the New South Wales district registry of the Federal Court of Australia on October 12, the board denied McBain access to documents released by the company’s appointed strategic review adviser Macquarie Bank on September 27.
McBain said an external party informed him in early October that a process had commenced by OFG involving the information packages and this would effective mean the company was for sale.
In early October McBain made another attempt to obtain a copy of the information packs, this time through his solicitors.
Last week McBain attended a meeting at the request of rumoured bidder funds management firm MFS. At this meeting McBain learned that bids had been sought for the sale of OFG, with the preference of the group being sold as one entity rather than sold off in divisions.
“I had not been informed by the board sub-committee that OFG was seeking bids for its sale and was extremely concerned to be informed that such bids had been sought with an imminent deadline,” McBain wrote in the affidavit.
Believing OFG may have ‘exceeded its charter’ and had sought indicative bids for sale without authority or approval of the company’s board of directors, McBain undertook legal proceedings to gain access to company documents.
“I am also concerned that the sale process being implemented may not be in the best interests of the company or its shareholders and I have been denied the ability to assess and consider the sale process and its impact on the company and accuracy of the material provided to bidders about the company,” McBain said.
“I seek access to the documents and information requested in these proceedings so I may be fully informed about the activities of the defendant [OFG] and the board sub-committee and am concerned if I do not receive that information until after the bids have lapsed or been processed and considered by the defendant, the defendant may have lost a valuable ‘one-off’ opportunity to maximise returns for shareholders.”
In July last year OFG division OFM Investment Group bought Century Funds Management for $42.4 million in cash and shares.
OFG managing director Chris Martin could not comment on the court proceedings.
The proceedings continue.
