The Takeovers Panel has declared that circumstances involving two entitlement offers at media firm The Market Herald were unacceptable.
The Takeovers Panel has declared that circumstances involving two entitlement offers at Perth-based media firm The Market Herald were unacceptable, citing a lack of disclosure regarding the association of some shareholders.
The panel, which is considering what orders will be made following the declaration, focused on a period from August last year through to January this year, during which the ASX-listed company acquired the Gumtree, Carsguide and Autotrader websites for $86 million and sought to raise funds to cover part of the acquisition and reduce debt via entitlement offers.
During the period its managing director Jag Sanger also quit following an attempt by the company’s board to oust him.
Following a February application by substantial shareholder UIL, the panel said today that it found that David Argyle, who controlled a big stake in The Market Herald, and his son Gavin Argyle, another substantial shareholder and company director, “became associated for the purpose of controlling or influencing the composition of TMH’s board or the conduct of its affairs”.
In addition, the panel also found further associations with other people, including two employees who took up shares under the entitlement offer and non-executive chairman Alec Pismiris.
In a statement, the Takeovers Panel said it considered that the circumstances were unacceptable because, among other things, shareholders in The Market Herald and the broader market were not informed of the aggregate relevant interest in shares held by the associated parties or various other arrangements between them.
The panel said that there had been “numerous contraventions of the substantial holder provisions” and that booklets for the two entitlement offers, the first around September last year followed by another earlier this year, did not disclose the association between the Argyles.
In fact, the first entitlement offer specifically stated that the Argyles were not considered associates and, as such, their shareholdings were not aggregated.
The Market Herald said it would keep shareholders updated in relation to material developments with respect to the panel application.
UIL is understood to be a vehicle of investor Duncan Saville.