AN extraordinary rift between two blocs of shareholders could unravel the planned $5.4 million backdoor listing of Total Corrosion Control on the Australian Stock Exchange.
One group of shareholders led by investor Gavin Argyle has pursued the listing and a merger with TCC’s main competitor, Fero Industries, despite the opposition of TCC’s incumbent management.
TCC managing director Terry Iannello has responded by launching legal action against Mr Argyle’s company First Distribution Services and a former business partner, Anthony Carmignani.
Mr Iannello claimed FDS gained a majority shareholding in TCC after acquiring Mr Carmignani’s equity, contrary to an earlier verbal agreement.
The backdoor listing was announced this week by shell company mBox.com, which said it planned to acquire TCC by issuing shares and/or cash worth $5.4 million to the vendors.
The directors of mBox.com include Robert Franco, whose father Mario Franco is a joint owner of merger target Fero Industries.
A statement from mBox.com gives the impression that the current directors of TCC support the transaction but in seeking comment from those named WA Business News found the situation to be more fluid than implied.
First, mBox.com states that John Hyslop “is currently the chairperson of TCC and has consented to be named as such”.
Mr Hyslop told WA Business News he was chairman of the operating company, which has been enjoying strong growth, but does not have any involvement with the holding company, where the dispute resides.
“mBox asked me if I would object to being proposed as chairman of the new business should the transaction proceed,” Mr Hyslop said.
“I said I had no objection but that doesn’t mean I have agreed.
“I would need a lot more information about the transaction before making that decision.”
Second, mBox said Mr Iannello “is currently a director of TCC and has consented to be named as such”, yet his court action signals his opposition to the proposed transaction.
Third, mBox.com said it was “pleased to nominate Reg Gillard as non-executive director to replace Robert Franco who will resign”.
However, Mr Gillard told WA Business News he had not yet agreed to take up the position and was waiting for a briefing on the shareholder dispute.
Mr Iannello’s attempt to block the proposed transaction suffered a setback last week when Federal Court judge Robert French dismissed his application for an interlocutory injunction.
“Although there are arguable questions to be tried between the applicants and FDS, the balance of convenience is not strongly in favour of the applicants and their delay in bringing proceedings militates against the grant of inter-locutory relief,” Justice French said.
The ruling was subject to FDS agreeing to disclose the terms of the proposed transaction to Mr Iannello and his fellow executives and “obtaining an independent expert opinion that the proposed consideration is fair and reasonable”.
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