Yowie’s HHY Fund Dilution Cuts Keybridge Voting Power by Nearly One-Third

Background to the Dispute

Keybridge Capital Limited has escalated its concerns over governance at Yowie Group Ltd by applying to the Takeovers Panel. The dispute centers on the HHY Fund, an unlisted managed investment scheme that holds just over 10% of Yowie’s shares. Keybridge alleges that the responsible entity for HHY, Aurora Funds Management Limited, has issued a significant number of new units without proper notice, diluting Keybridge’s and Wilson Asset Management’s voting power.

This alleged dilution comes at a sensitive time, with Keybridge and other investors seeking to replace Aurora as the responsible entity of HHY. The timing and scale of the new unit issuance; 42% more units; have raised suspicions that it was designed to prevent a change in control.

Implications for Yowie’s Governance

The dilution has reduced Keybridge’s HHY unit holding from 31.15% to 21.89%, and Wilson Asset Management’s from 31.98% to 22.48%. This shift significantly weakens their influence ahead of Yowie’s scheduled shareholder meeting under section 249F, which is focused on board composition and control. Notably, Yowie postponed this meeting to 14 July 2025, while Keybridge shareholders have called their own meeting for 27 June 2025.

Keybridge contends that some Yowie directors, who are themselves subject to removal resolutions, may be involved in orchestrating this dilution to maintain control. The application to the Takeovers Panel requests interim orders to prevent these directors and their associates from acquiring further interests in HHY and to require disclosure of their voting power and unit issuances.

Regulatory and Market Context

The Takeovers Panel has yet to appoint a sitting panel or decide whether to proceed with the application. The Panel’s involvement will be critical in determining whether the alleged actions comply with the Corporations Act’s requirements for efficient, competitive, and informed markets. Keybridge argues that the current situation undermines these principles.

For investors, this dispute highlights the complexities of control battles in listed companies, especially when unlisted managed funds hold significant stakes. The outcome could influence not only Yowie’s boardroom but also the governance practices of similar investment structures.

Looking Ahead

As the Takeovers Panel reviews the application, market participants will be watching closely. The resolution of this dispute will shape the dynamics of Yowie’s shareholder base and potentially set precedents for how dilution and control issues are managed in the ASX environment.