Yowie’s Share Placement Sparks Legal Clash, Threatening Control Stability
The Takeovers Panel has received a contentious application from Keybridge Capital challenging Yowie Group’s recent private share placement, alleging breaches of takeover laws amid internal disputes within Keybridge.
- Keybridge Capital holds 78.34% voting power in Yowie Group
- Dispute centers on Yowie’s private placement of 34.4 million shares at a 7% premium
- Keybridge alleges placement breaches 20% takeover prohibition under section 606
- Internal conflict within Keybridge over authority to file the application
- Takeovers Panel yet to appoint a sitting panel or decide on proceedings
Background to the Dispute
Yowie Group Ltd, an ASX-listed company, finds itself at the center of a takeover-related dispute following a private placement of shares that has drawn a formal application to the Takeovers Panel from Keybridge Capital Limited. Keybridge, which holds a substantial 78.34% voting stake in Yowie, has challenged the legality of the placement, alleging it contravenes the Corporations Act’s takeover provisions.
The private placement involved the issuance of over 34 million new shares at 1.5 cents each, representing a 7% premium to Yowie’s last traded price. This move was intended to raise approximately A$516,000 from wholesale investors. However, Keybridge contends that the placement effectively results in Yowie having a relevant interest in itself, which, combined with Keybridge’s and WAM Group’s interests, breaches the 20% ownership cap under section 606 of the Act.
Internal Turmoil Within Keybridge
Complicating matters further is an internal dispute within Keybridge Capital. Nicholas Bolton, Keybridge’s CEO, has publicly stated that he did not authorise the application to the Takeovers Panel and questions the legitimacy of Keybridge’s authority to make such a filing. This internal conflict follows a series of governance upheavals earlier in the year, including the appointment of an administrator to Keybridge and the removal and replacement of several directors.
These governance changes have added layers of uncertainty to the dispute, as the legitimacy of Keybridge’s actions and its control over Yowie are now under scrutiny. The involvement of WAM Group, which holds a 45% stake in Keybridge, further complicates the ownership and voting dynamics at play.
Regulatory and Market Implications
The Takeovers Panel has yet to appoint a sitting panel or make any decision regarding the application, maintaining a neutral stance on the merits of the claims. Meanwhile, Yowie has proceeded with its plans, including announcing a conditional scrip takeover bid for Keybridge shortly after the administration of Keybridge ended.
Keybridge seeks interim orders to halt further issuance of the contested placement shares and to prevent their disposal if issued. It also seeks final orders to either cancel the shares or restrict their voting rights for 12 months, aiming to curb what it sees as an unlawful dilution of control.
This dispute highlights the complex interplay between corporate governance, takeover law, and shareholder rights in the ASX environment. Investors will be watching closely as the Takeovers Panel and courts navigate these competing claims, with potential ramifications for control and strategy at Yowie.
Bottom Line?
The unfolding dispute over Yowie’s share placement could reshape control dynamics and set a precedent for takeover challenges.
Questions in the middle?
- Will the Takeovers Panel appoint a sitting panel and what interim measures might it impose?
- How will the internal conflict within Keybridge affect its influence over Yowie’s future decisions?
- Could the outcome of this dispute trigger broader regulatory scrutiny of private placements in contested takeovers?
