Yowie promises to return $4.4m to shareholders amid fresh Aurora bid

Yowie has announced
a 2.0 cents per share return to Yowie investors following a fresh takeover bid from Aurora Capital.

Aurora lodged a bidders’ statement with the ASX on Friday having already flagged the all-scrip takeover offer for the troubled confectionery company in May.

The unsolicited bid is the equivalent value of 9.0 cents per Yowie share, which represents a 45 per cent premium to the company’s share price before the statement was lodged on Friday.

Yowie Group chairman Louis Carroll said in a letter to shareholders on Friday that Aurora’s bid “severely undervalues” the company and urged investors to reject it.

“The Aurora offer places no value on the business and is less than the cash backing in the company,” Carroll said.

In Aurora’s statement the company repeated concerns about Yowie’s performance and accused board and management of failing to bring the business to profitability.

Though a formal response to the offer is being prepared, Carroll announced a 2.0 cents per share return to Yowie investors, subject to shareholder approval, with potential for more if the company meets its forecast sales figures.

“We ended the 2019 financial year with just over $US16 million [$A22.8m] in cash and are forecasting using only a small part of this for working capital,” Carroll said in a release.

The confectionery company also announced the resignation of director Tim Kestrell on Friday.

Last week the Australian Securities and Investments Commission (ASIC) appointed Morgan Stanley to sell a 13 per cent stake in the chocolate company, that was acquired by Wilson Asset Management International (WAMI) during an unsuccessful takeover bid by Keybridge Capital.

In April, the Takeovers Panel declared “unacceptable circumstances” at Yowie and vested about 28 million shares to ASIC.

The panel found that the shares purchases resulted in a contravention of section 606 of the Corporations Act and that WAMI contravened section 671B of the Act by failing to give details of its interest in Yowie shares. 

Carroll said on Friday he expected Yowie to return to growth by the end of FY19 with the Yowie Bites products rolling out and US distribution figures increasing thanks to deals with stores such as Kroger and Dollar General.

He said the board was overseeing a “gradual turnaround” in the company’s performance.

Yowie reported a 4.0 per cent drop in first-half revenue to $US7.72 million, thanks to a so-far disappointing US market foray.

The company’s first-half net loss reduced by 75 per cent to $US871,000 as it continues the cost-saving program launched in January 2018.

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