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May 20, 2019

Yowie subject of new takeover offer from Aurora Funds Management

Australian confectioner Yowie Group has become the target of a new takeover offer following the withdrawal of Keybridge Capital.

By Dean Best

Australian confectioner Yowie Group has become the target of a new takeover offer, this time in the form of shareholder Aurora Funds Management.

The fund’s Aurora Dividend Income Trust (ADIT) is making a so-called scrip takeover offer for Sydney-listed Yowie where shares are offered in the acquiring firm instead of cash. 

Each ADIT unit is valued at nine Australian cents, according to a statement today (20 May) from Aurora Funds Management, which added the bid represents a 16.8% premium to the previous closing share price of 7.7 cents.

Earlier in the year, New South Wales-based investor Keybridge Capital launched a bid for loss-making Yowie, while a counter offer was also lodged by rival asset management firm Wilson Asset Management.

However, earlier in May Keybridge withdrew its bid following another set of disappointing results from Yowie, which has operations in Australia, New Zealand, the US, Canada and the Asia Pacific. 

The investment firm currently holds 6.05% of the business, while Keybridge also has a “relevant interest” in a further 12.18% of Yowie held by Aurora Funds Management under its HHY Fund, which is also listed in Sydney and is a former subsidiary of Keybridge.  

Aurora is making the bid amid disquiet over Yowie’s earnings and amid the appointment this month of Tim Kestell as a non-executive director, who has experience in the capital markets, specialising in corporate restructuring, deal generation and funds management, according to a stock exchange filing at the time.  

Aurora said today: “This performance [Yowie’s] is simply not sustainable. On 17 May, [Yowie] appointed a new director to the [Yowie] board who has no discernible experience in the [Yowie] business nor a substantial shareholding. Aurora is both surprised and alarmed by this appointment.” 

The fund added that it has “held significant concerns regarding the financial performance, leadership and corporate governance” of Yowie for some time. “The directors of Aurora believe that decisive action is required to address the issues within the [Yowie] business”. 

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