360 Capital makes bid for Evans Dixon, calls share rights into question

360 Capital makes bid for Evans Dixon, calls share rights into question

Less than one month after being invited to join the Evans Dixon (ASX:ED1) board, funds manager 360 Capital Group (ASX:TGP) has launched a $115 million bid to snap up the crisis-plagued financial advisory group.

360 Capital Group's bid would see a wholly-owned subsidiary snap up the 80.45 per cent of Evans Dixon it does not already own.

The Sydney-based investment group had lifted its stake in Evans Dixon to 19.55 per cent in September, at which point the company's group managing director, real estate veteran Tony Pitt (pictured), was invited to join the Evans Dixon board.

It caps a wretched period for Evans Dixon and its shareholders who have watched the company's share price flounder from an opening of $2.50 upon listing in May 2018 to wallow at a low of $0.395 amidst an astonishing array of setbacks.

These include troubles at the company's US subsidiary US Masters Residential Property Fund (ASX: URF), which was founded to ride a bouyant US East Coast real estate wave but instead saw its value nearly wiped out.

In the off-market move 360 Capital has offered a mix of cash and shares valuing Evans Dixon shares at $0.61 a share, meaning 360 would have to splash out about $115 million to wrest absolute control of Evans Dixon.

In reponse to the move Evans Dixon urged shareholders to sit tight and ignore the offer or any documents they received from 360 Capital.

"The Company notes the 360 Capital Offer is unsolicited and highly conditional. The Company will provide a further announcement in due course when it has evaluated and assessed the terms of the 360 Capital Offer," Evans Dixon said in a statement.

One of the contentious conditions in the announcement was 360 making the offer contingent on the withdrawal or non-adoption of a resolution at Evans Dixon's upcoming annual general meeting.

The resolution that caused 360's ire would, if approved, allow Evans Dixon to approval the issue of options and shares under its options/rights plan.

However, 360 Capital asserted this would enable Evans Dixon to increase the control that management had over the company.

"360 Capital is concerned that concentrating ownership in the hands of management personnel will be adverse to shareholders and, amongst other things, will reduce liquidity and the attractiveness of the Company as an investment," the company said in a statement to the ASX.

"360 Capital is generally supportive of incentivising employees but does not consider this resolution to be appropriate in the context of the Offer."

In what has been a wild ride for Evans Dixon shareholders this year they have seen the company record a loss of $30.5 million for the 2020FY, the resignation of founder Alan Dixon in July for 'personal reasons' and corporate watchdog ASIC dragging company subsidiary Dixon Advisory and Superannuation Services Limited to the Federal Court to face mulitple charges.

Added to that were the ongoing woes at US subsidiary US Masters Residential Property Fund (ASX: URF) which after starting the year with its shares in the $0.80 range has haemorrhaged value to languish at $0.23.

Evans Dixon proposed a name change to E&P Financial Group earlier this month.

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