Liberty Resources is set to proceed with its move into the IT sector, through the acquisition of Cirrus Networks, after taking the extraordinary step of having a board spill to hasten the removal of two directors.
Liberty Resources is set to proceed with its move into the IT sector, through the acquisition of Cirrus Networks, after taking the extraordinary step of having a board spill to hasten the removal of two directors.
Perth-based Liberty announced in October it had entered an option agreement to buy recently established IT business Cirrus Networks.
Since then the company has gone through an untidy process to remove three directors associated with its past as a minerals explorer.
Shareholders voted against the re-election of James Becke at last year’s AGM, and used the same occasion to vote against the company’s remuneration report.
That constituted a ‘second strike’ and paved the way for a spill meeting, which resulted in NSW-based chairman Ian Smith and Toronto-based director Horst Hueniken being voted off the board this morning.
That leaves the company with three directors, which managing director Andrew Haythorpe believes is appropriate while it works on the Cirrus deal.
Mr Haythorpe told Business News the company had been through “a pretty torrid time” during the past two years, including attempts by a Chinese shareholder to gain control.
That period included an extraordinary general meeting last February, when dissident shareholders tried to spill the board and appoint their own nominees.
“We’ve had the resources sector collapse upon us as well,” Mr Haythorpe said.
He said the main goal of the three current directors was to minimise spending while they pursued the Cirrus deal.
“To execute that kind of right turn, you also want everyone sitting close together,” Mr Haythorpe said.
Fellow directors Charles Thomas and Patrick Glovac are both directors of ASX-listed Applabs Technologies, which took a stake in Liberty last June.
Mr Glovac is expected to continue on the board after the Cirrus acquisition is completed.
He is likely to be joined by Cirrus founder and chief executive Frank Richmond, along with recently appointed Cirrus chairman Andrew Milner, and director Matt Sullivan.
Mr Milner’s past experience includes founding Wantree Internet, serving as a director of iiNet (after it bought Wantree), co-founding IT business L7 Solutions, and recently establishing marketing firm Roobix.
Mr Sullivan was chief executive of L7 Solutions until Amcom Telecommunications bought it in 2011.
The planned Liberty-Cirrus deal is one of 25 Western Australia-related backdoor listings to have been announced over the past year.
A detailed analysis of this trend will be in the 2014 corporate finance review, in next week’s print edition of Business News.
