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Update (6 June 2025): The president of the Takeovers Panel has made interim orders that those people and entities alleged to be connected must not dispose of, transfer, charge or otherwise deal with their shares or interests in shares in Mayfield. The orders will be in effect until the earliest of further order, determination of the proceedings or two months from the date of the interim orders.
Mayfield Childcare (ASX: MFD) has cried foul to the Takeovers Panel over an attempt from shareholder Genius Education to remove independent chair Roseanne Healy from the board, alleging it has built an undisclosed voting bloc of connected parties in violation of the Corporations Act.
The Genius Education Group, which this year has had two affiliated companies that own the majority of its childcare centres enter administration, is by far the largest shareholder in Mayfield and is owned by its sole director Darren Misquitta.
It is a position that Misquitta and Genius secured as part of a $39.2 million deal in 2021 to sell 14 childcare centres to Mayfield, comprising a mix of cash and more than $31 million in shares.
The following year Genius failed in an unsuccessful takeover bid for Mayfield at $1.35 per share, but after withdrawing the offer retained its 34.23 per cent holding until a share sale earlier this year reduced its stake to 30.62 per cent.
A pattern of declining occupancy rates and performance has seen the Mayfield share price fall almost in half over the past 12 months to its current level of $0.38, with its leadership now in a state of renewal after new CEO Daniel Stone started in the role at the end of March.
Roseanne Healy, a director who was promoted to independent chair at the end of January, last week spoke highly of Stone's impact, noting a "material positive shift in the profitability and performance of the business" under his leadership and "strategic reset".
Stone replaced former CEO Ashok Naveinthiran, who filed his resignation in September 2024 and retired from the position in March, founding his own childcare company Steps Early Learning before his departure from Mayfield.
On the last day of 2024 Mayfield announced an incubator partnership with Steps aimed at carrying out future childcare acquisitions, thus bringing to a close an incubator arrangement it had with Genius under the 2021 deal.
Working capital for the new incubator with Steps was provided by Finexia (ASX: FNX), which is reportedly also one of Genius's biggest creditors.
Documents filed with the corporate regulator show that Mayfield has a 9 per cent stake in Naveinthiran's company, which to add further complexity to the situation acquired at least six childcare centres from Genius a few months ago, according to ABC reporting.
On 12 May Misquitta then threw a spanner in the works requesting a shareholder meeting to vote on the proposed removal of Healy as a director.
Mayfield was due to hold its annual general meeting (AGM) just over a week later on 20 May, but the day before requested a postponement so it could prepare its complaint to the Takeovers Panel.
Yesterday afternoon it was revealed that the Australian Securities and Investments Commission (ASIC) had granted the extension for the AGM to take place on 30 June. Shortly after that its Takeovers Panel submission was announced on the ASX.
In its submission Mayfield asserts that Misquitta and alleged connected parties have in fact "acquired a voting power in a minimum aggregate of 43.66 per cent of Mayfield's voting shares", which it claims is in contravention of section 606 of the Corporations Act that dictates the size of holdings investors can acquire at certain limits.
Mayfield also alleges Genius failed to fully disclose the relationship between the connected parties in contravention of section 671B.
The filing lists the alleged connected parties as Darren Misquitta, Genius Holdings, Genius Education, Finexia, Finexia Wealth, Lazarus, PLC, Hoppers Lane, Kevin Wright, Rothman, David Robert May, Joseph Carbone, OPM and Rush Asset Holdings.
Mayfield has sought interim orders to prevent the alleged connected parties from acquiring further shares or increasing their voting power in Mayfield, disposing of or transferring any shares held directly or indirectly, or exercising any voting rights attached to their combined shares held at any Mayfield shareholder meeting while Takeovers Panel proceedings are ongoing.
The company has also requested orders that the alleged connected parties be required to disclose their combined voting power, that they be prevented from exercising any voting rights attached to their aggregated shareholding, and that any shares in excess of 30.62 per cent be vested to ASIC and sold by private tender to non-associated parties.
Mayfield has also sought orders that the alleged connected parties be prohibited from making any further acquisition of shares unless permitted by section 611.
MFD shares are up 8.57 per cent today at $0.38 at the time of writing.
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