Yowie shareholders advised to take no action on $19.6m Aurora takeover bid

Perth confectionery company Yowie Group has advised shareholders to take no action in respect of Monday’s $19.6 million all-scrip takeover bid by Aurora Funds Management Limited until the Yowie Board makes a formal recommendation.

In a statement on Monday, Yowie said the board considers the unsolicited approach by Aurora to be “highly opportunistic”.

Aurora offered the equivalent of 9.0 cents per share in unlisted units of ADIT shares, a 16.8 per cent premium to Yowie’s closing price on Friday, saying that “decisive action” is needed to turn around the troubled company and that the bid “potentially provides YOW shareholders with a value accretive exit strategy”.

“For some time, Aurora has held significant concerns regarding the financial performance, leadership and corporate governance of YOW,” Aurora said.

“The latest quarterly report … clearly demonstrated that YOW management are not closer to turning around the business, with deteriorating sales performance and a net cash outflow of $US1.787 million.”

The moves comes nearly three weeks after Keybridge Capital abandoned its bid for Yowie after a disappointing quarterly report, citing the 50 per cent decline in operating revenue, among other things.

Yowie said that should a bid be made on the terms outlined by Aurora, the Board would recommend shareholders reject the bid.

“The advised bid price of 9 cents per Yowie share, which will comprise
solely of units in an unlisted managed investment scheme, fundamentally undervalues Yowie’s business, brand, intellectual property and significant cash balance,” Yowie said in a statement.

The bid would allow YOW shareholders to redeem their ADIT units off-market for cash, Aurora said.

Aurora currently holds a 12.24 per cent interest in YOW. Another 30 per cent of shareholders need to accept the bid, at a minimum, by mid-August for it to take effect.

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