07/09/2015 - 10:52

Diploma seeks privatisation

07/09/2015 - 10:52


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Eight years after Diploma Group listed on the ASX, the Di Latte family is looking to buy back the business from shareholders.

Diploma seeks privatisation
Diploma chairman Nick Di Latte.

Eight years after Diploma Group listed on the ASX, the Di Latte family is looking to buy back the business from shareholders.

Diploma said non-binding discussions with its top four shareholders Wandina Holdings, UP Investments, Healthy Holdings and ND Properties could lead to a proposal for the acquisition of all remaining securities in the business.

The four entities hold a combined 45.43 per cent interest in Diploma, with Healthy Holdings, Wandina Holdings and UP Investments each owning 11.35 per cent, according to Diploma’s last annual report to shareholders, which was released in October last year.

ND Properties, which is Diploma’s largest shareholder with an 11.38 per cent stake, is also controlled by Diploma executive chairman Nick Di Latte.

According to Australian Securities and Investments Commission documents, Wandina Holdings is owned by Mr Di Latte’s father, Dominic, who was also the founder of Diploma Holdings.

Healthy Holdings is owned by Francesco Di Latte, while UP Investments is owned by Natalie De Felice, who is employed by Diploma as a financial controller and is related to Nick Di Latte.

The company has formed a committee comprising its two independent directors to consider the transaction.

“It is anticipated that the transaction may take place by way of a scheme of arrangement by a special purpose bid-company that will be jointly owned by the substantial shareholders,” Diploma said.

“Notwithstanding these preliminary discussions will take place, the independent directors wish to emphasise that there is no guarantee that any transaction will proceed.

“Given the degree of uncertainty, the independent directors make no recommendation to shareholders other than (they) do not need to do anything in relation to these discussions,” it said.

Diploma was formed in 1976 when Mr Di Latte’s father, Dominic, established Diploma Homes, a construction company providing services largely to the residential building market.

It expanded in 2004 and after moving to its current head office in Belmont it was renamed to Diploma Construction, and was listed on the ASX as Diploma Group in 2007.

In March, Diploma underwent a board shake-up when then-chairman Ian Olson announced his resignation from the company.

Mr Di Latte took the helm as executive chairman and chief executive, while Jason Ferris was appointed as a non-executive director.

The following month, Carl Lancaster resigned from his position as a non-executive director, a position he served in since the company listed, with the role filled by Jeff Hill.

Diploma shares were up 15.3 per cent to 1.5 cents at 1:50pm.

That’s a small sigh of relief for investors in the company, who have watched Diploma’s stock fall from 4.1 cents in February to an all-time low of 1.1 cents at the end of August, when it announced to the market that it had incurred a $10.8 million loss for the financial year, with revenue falling to $88.9 million – less than half the level it reported in FY14.

Diploma currently has a market capitalisation of just under $7.1 million.


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