09/12/2020 - 16:03

Agency board questions “unsolicited” proposal

09/12/2020 - 16:03

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The board of The Agency Group has urged shareholders to ignore a proposal by an entity associated with the real estate company's ex-director and major shareholder.

The Agency managing director Paul Niardone (left) and chief executive Matt Lahood.

The board of The Agency Group has urged shareholders to ignore a proposal by an entity associated with the real estate company's ex-director and major shareholder.

The Agency said it received a letter last Friday from Magnolia Equities III Pty Ltd that set out a “proposal to make an unsolicited, conditional offer” to purchase all shares in the Agency.

Magnolia is led by ex-Agency director Mitchell Atkins.

Mr Atkins departed the Agency earlier this year when Magnolia injected $5.6 million into the real estate group by way of a share placement, so as to avoid a conflict of interest.

The Agency board today accused Mr Atkins of providing a copy of the takeover letter to select media outlets, with one article recently appearing in The Weekend Australian citing a takeover bid from Magnolia Capital.

The Agency, based in Perth, said its board considered the article to be misleading “because the article refers to a takeover bid as opposed to a proposal to make a takeover bid”.

No formal bid for the company has been received, the Agency said, which also argued the proposal from Magnolia included conflicting and confusing statements, amongst making other claims.

The Agency, which has a market cap of about $15 million, said the board was sceptical of Magnolia’s ability to raise money required to complete the takeover (assuming an all-cash deal) and arrange for a replacement of the Agency’s existing Macquarie Bank facility.

No funding details were provided in the letter the Agency received on Friday.

The board, which includes managing director Paul Niardone and chief executive Matt Lahood, said there was no guarantee a formal bid would be received. It has advised shareholders to take no action in relation to the Magnolia proposal.

The Agency has sought orders from the Takeovers Panel that Magnolia discloses how it will pay the total consideration under the takeover proposal and repay the Agency’s Macquarie facility.

The real estate group says it will provide funding evidence to shareholders at its annual general meeting, scheduled for December 23.

The Agency remains in a trading halt, as requested on Monday.

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