Besieged property group The Agency (ASX: AU1) scored a couple of breakthroughs with the courts and regulators today against Magnolia Capital, a fund connected to substantial shareholder and former director Mitchell Atkins.
Magnolia may have withdrawn its takeover bid for The Agency after shareholders overwhelming supported a funding scheme with Bob Peters-backed Peters Investments, but the Federal Government's Takeovers Panel has put the matter to bed.
The panel made a declaration of unacceptable circumstances for Magnolia's bid, and made orders that Magnolia be restrained from dispatching its bidder's statement without the panel's consent.
In a release, The Agency noted it was glad that the Takeovers Panel has acknowledged the concerns held by AU1 regarding Magnolia's disclosure of its funding arrangements and found that Magnolia's failure to address those matters constitutes unacceptable circumstances.
In addition, AU1 notes the panel found that there were no unacceptable circumstances regarding the company's AGM and the approval of the Peters Investments funding arrangements.
"This was a resounding success for The Agency Group, who have had to deal with these baseless and distractionary antics of Mitchell Atkins and Magnolia Capital," says The Agency Group managing director Paul Niardone (pictured).
"The Board remains resolute on continuing to deliver on its long-term strategy and deliver positive outcomes to all stakeholders, including staff, agents, clients and shareholders.
"The Agency strongly refutes any suggestions that it is insolvent. AU1's directors are confident in their plans for the future and recent independent reviews have bolstered that confidence."
Niardone highlights the company is in a strong financial position, with new major shareholder Peters Investments providing a new stable and financial major shareholder to support The Agency in its continued growth.
"Mr Atkins' comments that he may consider a future control transaction appear to be inconsistent with his assertion that AU1 is insolvent," he says.
"It appears that Magnolia is still considering only what is in its own best interests and ignoring the detrimental effect of its disruptive actions on Magnolia's own shareholding and AU1's other shareholders."
A Federal Court in Western Australia recently determined a purported administration of The Agency, as called by Magnolia, would not take effect.
There was still the opportunity for creditors or interested parties to attempt to overturn the court's orders, but no one turned up to do so at a hearing today and the purported administration of AU1 will end at 4pm Perth time.
At this hearing orders were made programming the hearing of MCL 105 Pty Ltd's debt claim, which is disputed by AU1. That claim will now be heard on 4 March 2021.
AU1's directors welcome the end of the purported administration and its disruptive effect on AU1 and look forward to continuing to act in the long-term interests of shareholders and other stakeholders.
Despite the setbacks to its cause and the categorical rejection of its insolvency allegations against The Agency, Magnolia has issued a response today insisting concerns remained.
Atkins claims the panel's ruling and orders were merely technical in nature.
"At this stage, Magnolia still has a number of concerns about the solvency of the Agency and is awaiting the audited half yearly financial accounts," he says.
In its recently released unaudited results for the December half, The Agency reported a record revenue of $29 million and an EBITDA of $1.6 million net government incentives.
"Magnolia remains an interested and significant shareholder and will continue to keep its options under active review. This might include a future control transaction, should the Federal Court return the Agency to the control of the directors later today," Atkins adds.
"In the meantime, Magnolia and its advisers will continue to pursue the concerns raised in the Bidders Statement and trust that the Agency's directors are working to resolve them."Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support