McDouall Stuart pans Cynotech takeover bid amid full-year loss
The broker joined the independent adviser's report on the Cynotech offer in panning the deal, saying in a section entitled ‘(Pig of a) Takeover offer' "an Independent Adviser's report concluding against a proposed transaction is rare, in fact, we cannot recall the last such occurrence in the local market."
Allan Hawkins, of Equiticorp infamy, is offering preference shares in a shell company, Cynotech Securities Group, in exchange for the shares, preference shares and warrants in Cynotech Holdings. The offer puts the issue price at 13.5 cents per preference share in the private company. Interests associated Hawkins' family currently own about 22% of the listed company, whose shares last traded at 6 cents for a market value of $7.6 million.
About 23% of shareholders, almost 16% of convertible preference shareholders and about 32% of warrant holders have accepted the offer.
The finance company posted a loss of $1.2 million in the 12 months through December, compared to a profit of $2.3 million a year earlier, as it changed its reporting period from March, after it wrote down the unrealised fair value of its ice cream cone business Snowdon Ltd.
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