UPDATE: GPG spurns A$220M takeover bid for ClearView
Guinness Peat Group says a A$220 million offer for ClearView Wealth that would install former director Gary Weiss as chairman is "wholly inadequate."
The 50 Australian cents-a-share offer from private equity firm Crescent Capital Partners "represents a substantial discount to the fair value of ClearView Wealth, said GPG, which owns about 48 percent of the ASX-listed financial services firm.
Crescent is seeking at least half of ClearView, saying its offer represents 8 percent premium to ClearView's three-month volume weighted average price, and is 11 percent higher than what GPG valued its stake at in its 2011 annual report.
Crescent has built up a 12 percent stake in ClearView from various put and call options with existing shareholders including Ariadne Australia, which counts Weiss as an executive director. If Crescent is successful in securing a full takeover, Weiss will be put forward to chair ClearView.
ClearView's shares jumped 14 percent to 53 Australian cents, exceeding the offer price in a sign investors see further value in the stock. ClearView is rated a 'buy' in a consensus of two recommendations compiled by Reuters, with a median target price of 60 Australian cents per share.
Shares in Guinness Peat Group rose 2.2 percent to 46 cents on the NZX and have shed more than a fifth of their value this year.
Crescent managing partner Michael Alscher said the offer "provides the opportunity for GPG to realise its investment in ClearView at a premium above its book value."
Earlier this year, Crescent Capital led the creditors' takeover of New Zealand building glass manufacturer Metro Glass Tech.
GPG has raised about 300 million pounds by divesting a third of its portfolio since embarking on its strategy to wind down last year, with a dozen investments sold this year.
This week the firm reached a deal with the trustee of the Staveley pension scheme, for which its liable, to cover the estimated 20.3 million pound funding deficit through a mixture of extra cash and expected returns from its investment portfolio.
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