Kerr takeover may give PGC investors bargain-hunting opportunity

Friday 20th January 2012 1 Comment

Pyne Gould Corporation shareholders may have the opportunity to sell their shares to George Kerr’s Australasian Equity Partners No. 1 LP and buy back in at a cheaper price, the company’s independent directors say.

Earlier this week, AEP passed the 50 percent takeover milestone which lets it take majority control of the financial services, but is unlikely to achieve full control, according to chairman Bryan Mogridge and independent director Bruce Irvine.

Kerr’s investment partner in the PGC takeover, US-based fund Baker Street Capital, is also an AEP shareholder.

Because of the stock’s lack of liquidity, the share price may fall, and that opens up opportunities for existing shareholders to accept AEP’s 37 cents a share offer with the strategy to buy back into PGC at a cheaper price.

“There is risk in this strategy, but we felt it important to point out the opportunity to shareholders and advise you that we as the independent directors will consider our position in this regard,” Mogridge and Irvine said in a statement.

AEP’s bid, which values PGC below the bottom-end of Grant Samuel’s range and the firm’s net tangible assets, closes at the end of the month.

The Kerr and Baker Street vehicle has not announced whether it will extend the offer or declare it unconditional. PGC shares were unchanged at 35 cents in trading.

(BusinessDesk)

BusinessDesk.co.nz

Comments from our readers

On 21 January 2012 at 12:43 pm Sucker said:

Compete with the takeoverers and only until it is delisted. They see value.