During the pandemic, there has been a rash of takeovers among S&P/ASX 200 Index (ASX: XJO) companies and private equity firms. For instance, the $16 billion merger of two ASX 200 gold mining giants, Northern Star Resources Ltd (ASX: NST) and Saracen Mineral Holdings Limited (ASX: SAR). Furthermore, there have been many other changes to company ownership, some by mutual agreement, others far more hostile. Let's take a look at a few examples.
WAM Capital Limited (ASX: WAM)
WAM Capital is in the final stages of two hostile bids. In the first instance, Concentrated Leaders Fund Ltd (ASX: CLF) rebuffed its offer, forcing an off market approach. In the company's announcement, it referred to the appointment of a new investment management firm without shareholder approval. Moreover, the firm is a private company owned by incoming CEO, Dr David Sokulsky, which was cited as a clear case for poor governance. By 21 October, WAM had secured 23.43% of voting rights.
On the second occasion, Contango Income Generator Ltd (ASX: CIE) also rejected an on market offer. In announcing the off market bid, WAM stated that the fund had "delivered deeply disappointing results and failed to provide shareholder value". It went on to bemoan "illogical changes to investment strategy", and "poor corporate governance". On 21 October, WAM declared it had secured 24% of voting rights.
On both occasions, WAM Capital called out each fund for persistently trading at below net tangible asset value per share.
Orora Ltd (ASX: ORA)
ASX 200 share, Orora, declared its Q1 results were in line with the previous year, an announcement that ordinarily would be unremarkable. However, the company saw its share price rise by 7.97% on Wednesday after rumours surfaced that private equity firms had been circling the company. The Orora share price is down by 31% in year-to-date trading, valuing it at approximately $2.6 billion. This is a figure that is well within the reach of large funds.
ASX 200 activity by private equity
United States private equity firm, Kohlberg Kravis Roberts (KKR), has been very active in the Australian takeover and buy out scene this year with ASX 200 companies. In May, Commonwealth Bank of Australia (ASX: CBA) announced it would sell 55% of Colonial First State, its wealth management arm, to the firm. In addition, Westpac Banking Corp (ASX: WBC) is believed to have had early conversations with KKR. The private equity firm is also said to have made an informal approach to AMP Limited (ASX: AMP). Notably, AMP currently has a range of potential suitors for its real estate assets, including Vicinity Centres (ASX: VCX).
Moreover, it has been reported that KKR was reviewing the possibility of a bid for church payment company Pushpay Holdings Ltd (ASX: PPH). It remains in active pursuit of listed and unlisted companies in Australia.
