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Australian investment firm Keybridge Capital has taken its takeover bid for local confectioner Yowie Group off the table.

In a stock-market filing made yesterday (2 May), Keybridge, which lodged its offer in March, pointed to a cashflow report Yowie published on Tuesday.

Keybridge said the quarterly cashflow report “disappointingly reported a significant operating loss, a nearly 50% decline in operating revenue from the previous quarter and a decline in the cash position of the company from the beginning of the quarter”.

The investment firm, which already held shares in Yowie, said the report stated the confectioner’s cash stood at US$18.751m on 1 January but by 31 March had dropped to US$16.982m.

Keybridge said one of the conditions of its bid was that Yowie’s cash had to be at a minimum of US$17m. The investment firm said it would “not be proceeding with the bid”.

In statements provided to just-food, Keybridge said it owns a 6.051% direct stake in Yowie, plus a further 12.182% in the business held indirectly.

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The indirect stake is held by Aurora Funds Management as a responsible entity of the listed HHY Fund. Keybridge is deemed to have an interest in HHY’s stake in Yowie because it has a greater than 20% interest in HHY, is also the investment manager of the fund and can control investment decisions.

Keybridge added: “We see ourselves as a long-term investor in Yowie and have no intentions of exiting the company.”

Since Keybridge tabled its offer in March, Wilson Asset Management (WAMI) has been building up shares in Yowie, a move that as prompted Keybridge to lodge a complaint with the Australian Government’s Takeovers Panel, citing violations of Australia’s Corporations Act.

On Wednesday this week, Wilson Asset Management and founder Geoff Wilson lodged a notice disclosing they had a direct interest in Yowie representing 13.934% of the company’s shares. The Takeovers Panel has ordered the majority of that stake – 12.433% – be vested at the Australian Securities and Investments Commission for sale.

However, Wilson Asset Management and Geoff Wilson also hold an indirect interest in Yowie via Keybridge’s and HHY’s holdings in the confectioner, giving an overall, combined direct and indirect stake of 19.734%.

Wilson Asset Management and Geoff Wilson had not responded to a request for comment at the time of writing.