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Brierley's India Equities swoops on ASX-listed managed investment scheme

Monday 12th December 2011

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Ron Brierley has yet to formally take control of ASX-listed India Equities Fund, but it has already launched its first takeover bid for a listed managed investment scheme that’s in the process of winding down.

India Equities is offering 4.8 Australian cents per unit, or A$3.9 million, to buy Adelaide Managed Funds Asset Backed Yield Trust (AYT) outright.

Brierley’s new investment vehicle emerged as a substantial shareholder just a day after his bid to control India Equities was revealed last month.

The offer for AYT units is a 9.1 percent premium to the 4.4 cents per unit the stock is trading at on the ASX, but a 13 percent discount to the net tangible asset value as at Nov. 30.

AYT’s residual assets are notes exposed to the Agricultural Managed Investment Schemes, which had some A$10.5 million of impairments recorded against them as at June 30. As part of the bid, India Equities is seeking to delay the delisting of the fund, which is due to take place this week, for a month.

The offer closes on Jan. 24, though because it’s an on-market bid, if the delisting is put off, shareholders won’t be able to sell beyond Dec. 15. If the bid’s successful, India Equities will continue with plans to remove AYT from an official listing, and wind the trust up once it received receipt of the remaining notes’ cashflow.

Any purchases will be covered by India Equities’ A$5.9 million in cash reserves.

Brierley emerged as a substantial shareholder in India Equities in July, when he bought 5.05 percent of the cashed-up investment vehicle for A$293,714.

That same month he lifted his stake to 14.8 percent. The investment comes after Brierley stepped down as chairman of GPG last year in the face of a shareholder revolt over plans to divide that investment company along regional lines.

More recently, Brierley has been building a stake in Wellington department store Kirkcaldie & Stains. India Equities shares were unchanged at 6.3 Australian cents on the ASX today, up from the 4.8 cents per share he bought them for in July.

Last month, India Equities entered into a sale agreement with Brierley’s Siblow investment vehicle to issue 103.8 million shares at a price of 8 Australian cents apiece, giving Brierley 54 percent of the company.

Brierley would tip in his holdings of Copper Strike, Trinity Group, ING Community Living Group, Australian Pharmaceutical Industries and Trojan Equity as payment.

The deal is subject to shareholder approval at a special meeting next month.

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