17/01/2006 - 21:00

Panel rules on Pivot, Saramac

17/01/2006 - 21:00

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The Takeovers Panel has ruled favourably in relation to objections by both the Pivot Group and Saramac Nominees about the other’s proposal to take over Axiom Properties Ltd.

Panel rules on Pivot, Saramac

The Takeovers Panel has ruled favourably in relation to objections by both the Pivot Group and Saramac Nominees about the other’s proposal to take over Axiom Properties Ltd.

Both Pivot and Saramac have made moves to take over the listed company, whose sole asset is a 40 per cent stake in the Port Geographe Canal development, just north of Busselton.

Both must now wait for the outcome of a shareholder vote to determine who will take control of Axiom.

Peter Laurence’s private company, Pivot Group, last year proposed to provide $5.3 million of funds to cash-strapped Axiom in exchange for a 60 per cent stake in the company.

One month after the Pivot offer, Saramac, which last year bought a 60 per cent interest in the Port Geographe project, launched its own rival bid at twice that of Pivot’s offer, at $10.6 million.

Saramac is a joint venture between developer Luke Saraceni and Macquarie Bank.

Both offers are based on an identical mix of shares, convertible notes and options, but Saramac would be entitled to nominate four directors to the Axiom board, where Pivot would be entitled to nominate three.

Late last year, Pivot applied to the Takeovers Panel to stop Axiom from sending information to shareholders on the two competing offers because a potential conflict of interest of directors nominated by Saramac was not disclosed.

Early this year, Saramac lodged its own objection, seeking the removal of a “no shop and no talk” provision in Pivot’s agreement with Axiom, which Saramac said prevented the consideration of alternative proposals.

In its decision, the Takeovers Panel said there was: “No suggestion that Saramac Nominees’ directors of Axiom would not fulfil their fiduciary obligations to Axiom shareholders – simply that the potential for conflict of interest clearly exists and had been inadequately disclosed and described.” The panel ordered Axiom to provide a new draft notice of meeting and explanatory memorandum.

The panel also ordered that the “no shop and no talk” provision gave rise to unacceptable circumstances and cancelled provisions in the Pivot agreement which forbid the consideration of alternative takeover proposals.

Next week, the first release of stage two of the Port Geographe development will be released with 70 lots for sale. It is understood that more than 90 registrations of interest have already been received.

Mr Saraceni told WA Business News last week he was pleased with the decision by the panel.

“Pivot’s no competition clause was struck out, and we are happy to explain to shareholders the potential for a conflict of interest, although that will not occur because of the fiduciary duties in place,” Mr Saraceni said. “The next step is that Axiom needs to prepare information for shareholders.”

He said the disagreement between himself and Mr Laurence had been handled in a very businesslike manner.

“Just because we are involved in competition on a company, it doesn’t change my view of him; I like him,” Mr Saraceni said.

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