All over bar the shouting and the lingering opposition from the board of Hunter Hall (HHL)? That’s after Washington H. Soul Pattinson (SOL) grabbed the 24.05% stake in the ethical fund manager still owned by founder Peter Hall.
Despite that boosting the Soul Patts’ stake to 22%, Hunter Hall International’s board has again urged shareholders to reject an upgraded $2.60 a share bid from Soul Patts.
Hunter Hall is still in a deal with unlisted fund manager Pengana for an all paper bid – Soul Patts owns 37% of Pengana, so has its foot on Hunter Hall no matter what happens.
Soul Patts lifted its all-cash $2 a share bid to $2.60 a share on Monday.
Now that Soul Patts has 37% of Pengana and now 44.2% of Hunter Hall, it will end up with around 39% if the Pengana merger succeeds.
Hunter shares fell 1.5% to the Soul Patts cash offer price of $2.60. So far as the punters are concerned, the war is over.
But there is another party in this mess – Pinnacle Investment Management which topped the $1 a share purchase of 19.9% of Mr Hall’s stake by Soul Patts, with a $1.50 a share and then $2 a share offer. It must be their turn to lob something confusing on the shareholders in Hunter Hall.
With the latest sale Mr Hall has received $22.7 million for his 44% holdings, well shy of the $37.2 million valuation on his stake prior to his initial stock sale to Soul Patts at $1 a share and shock departure on December 28.
A statement from Hunter Hall yesterday again told shareholders to ignore the latest Soul Patts offer amid focus on the likely May shareholder vote on the Pengana merger.
That vote will see Soul Patts unable to participate given its positions on both sides of the deal.
“The independent directors of Hunter Hall continue to recommend that you reject the WHSP cash offer as they consider the recently announced Pengana merger represents a materially superior proposal for Hunter Hall shareholders,” chairman Kevin Eley said.
“The revised WHSP cash offer also represents a discount to the estimated fair market value of Hunter Hall shares which has been assessed by the independent expert to be $2.75 to $3.20 per Hunter Hall share.”
While Soul Patts can’t vote, they can wait to the AGM and vote off the existing or new board. But with a stake on both sides of the deal and clearly the dominant shareholder, Soul Patts will probably sit back and build its stake to around 44% in the combined company. That is roughly what it owns in Brickworks and what brickworks owns in Soul Patts.
Soul Patts has never shown a need to mop up 100% of a company – it has 59% of New Hope (a coal miner), 25% of TPG (the country’s number 3 telco), and 24.6% of API, the big chemist and pharma retailer.
