IAN Trahar’s desire to control window furnishings group Kresta Holdings appears to have become an even tougher task with substantial shareholder Perpetual increasing its stake in the target after reportedly opposing the bid.
IAN Trahar’s desire to control window furnishings group Kresta Holdings appears to have become an even tougher task with substantial shareholder Perpetual increasing its stake in the target after reportedly opposing the bid.
Perpetual has emerged as Kresta’s third biggest shareholder after increasing its stake to 7.2 per cent through about 25 purchases between June and this week, which were previously undisclosed.
This week it was reported that Perpetual was opposed to Mr Trahar’s bid and would not be supporting it.
Perpetual was not the only major stakeholder to recently reveal its full holdings. Kresta’s major supplier, Taiwan-based Si Chuan Cheou, admitted last week to failing to lodge substantial shareholder notices with the company for the past 11 years.
Mr Cheou holds just over 7 per cent, having sold down from 9.19 per cent, apparently to another major stakeholder, fund manager Hunter Hall. Mr Cheou did not mention up to another 4 per cent of Kresta, which sources close to the group believe is held by his associates.
Hunter Hall also failed to disclose the purchase of more than 4.26 million shares, or almost 3 per cent of the company, for two months.
Mr Trahar and Hunter Hall, both with just less than 20 per cent of the stock, have been engaged in a fierce battle over boardroom control for Kresta, which has become a fully-fledged takeover bid in recent weeks.
Late last year, after a falling out over voting at Kresta’s annual meeting, Hunter Hall sought to have Mr Trahar, then chairman, and its own board nominee Peter Hatfull removed as directors at an extraordinary general meeting scheduled for Monday this week.
Mr Trahar launched a bid in January at 32.5 cents, valuing it at about $47 million, but conditional on efforts to remove him and Mr Hatfull failing. Mr Trahar also stepped down as chairman but remains on the board.
Last week, Kresta went to court to force the delay of the EGM for four weeks so shareholders could properly assess the bid, including an independent expert’s report due to be published in the next few days.
The control battle comes as the Malaga-based blinds maker faces weak consumer spending.
The poor market conditions and a near-$900,000 payout to former executives resulted in a significant dip in its interim profit reported last week.
Kresta reported a 63 per cent fall in first-half profit to $1.6 million, down from the $4.3 million it lodged in the same period last year. The profit includes a deduction of $874,000 relating to the termination costs of former CEO Tass Zorbas and another employee.
Revenue from sales was $60.7 million, down from $64 million in the prior half year.
Kresta said an underinvestment in product development, training and information technology by its previous management had left it vulnerable to the downturn in consumer spending.
Although it admitted the retail outlook was uncertain, Kresta said it was confident in its strategy as it continued to trade profitably.
