Sydney-based investment firm Washington H. Soul Pattinson (SOL) reports its 2016-17 interim results with the news that it has emerged with a 46.3% stake in ethical fund manager Hunter Hall International (HHL) after a bidding war that started in late 2016.
Soul Patts and its associate Brickworks, will both reveal their interim results this morning – Soul Patts should benefit from better results from its investment portfolio, especially companies such as New Hope, Brickworks and TPG. Now it will add a stake in Hunter Hall – having concluded its $2.60-a-share offer on March 21, having increased from the 19.9% stake in Hunter Hall from founder Peter Hall in late December.
Mr Hall sold a large part of his holding in Hunter Hall for $1.00 – well under Hunter Hall’s share price of $3.25 at the time – and Soul Patts said it would launch a takeover bid for the remaining shares in Hunter Hall for at least $1.00 a share.
Hunter Hall’s independent directors recommended shareholders reject the offer, saying it significantly undervalued the group’s shares.
Over the following months, investment group Pinnacle Investment Management launched a rival offer for Hunter Hall at $1.50 a share on January 23, prompting Soul Pattinson to increase its offer to $1.60 and Pinnacle then counter attacked with an increase to $2.00.
Hunter Hall again told shareholders to reject both takeover offers because they significantly undervalue the group’s shares.
In February, Soul Pattinson increased its offer to $2.20 a share and Pinnacle lifted its offer to $2.40, but in a surprise twist, Hunter Hall announced on March 9 that it had struck an agreement to merge with unlisted fund manager Pengana Capital.
But Soul Patts had just taken a 37% stake in Pengana, buying out the National Australia Bank. On March 14, Mr Hall sold his remaining 24.3% stake in Hunter Hall to Soul Pattinson for $2.60 a share, taking Soul Pattinson’s Hunter Hall shareholding to 44.2%.
That has all but shut out Pinnacle with Hunter Hall seemingly determined to merge with Pengana in an all paper deal that will see Soul Patts emerge as the biggest shareholder.
Hunter Hall shares ended at $2.53.
