Corporate raider Dr Gary Weiss (pictured) has launched his third bid to land a position on the board of Cromwell Property Group (ASX: CMW) as part of an improved takeover offer from ARA Group.
Weiss attempted to push for a seat at the Cromwell table at an extraordinary general meeting in March, and following a similar move at last year's annual general meeting in November 2019.
At both events Cromwell shareholders voted against the idea.
Cromwell has described ARA's actions as a "takeover by stealth" and "opportunistic", with the bid undervaluing the property group.
"Cromwell does not believe ARA's actions are in anyone's interest except its own," says Cromwell.
"ARA is attempting to secure control of Cromwell by launching its own hostile proportional takeover offer and seeking to install its nominees on Cromwell's Board under the guise of refreshing the Board to change Cromwell's already proven strategy."
The development comes nearly two weeks after ARA lifted its proportional takeover offer for a hefty stake in Cromwell to $0.92 per share.
ARA originally offered $0.90 per share, but that was lowered to $0.88125 due to Cromwell's June 2020 announced distribution.
The group also acquired around $61.6 million worth of Cromwell shares on offer at the time, so if the takeover offer is picked up by shareholders ARA would increase its holding in the property group to around 48 per cent.
While not a controlling share, this percentage would be enough to tip voting decisions in ARA's favour according to Cromwell.
The company currently holds 26.68 per cent of all Cromwell shares on issue.
"As Cromwell's largest securityholder with more than $650 million invested to date, the ARA Group's interests are aligned with all Cromwell securityholders and it is focused on ensuring sustainable value generation for ALL Cromwell securityholders over the long term," the suitor said on 7 August when announcing its lifted takeover offer.
"The ARA Group intends to provide Cromwell securityholders with further details regarding the automatic price variation, if any, via a Supplementary Bidder's Statement, which will be provided in due course and be despatched to securityholders in conjunction with the original Bidder's Statement."
At the time Cromwell expressed concern that ARA may utilise its proportional takeover bid as a means to acquire additional shares, enabling it to pass resolutions even with very little support from Cromwell shareholders.
"This is consistent with ARA's intention to refresh the Board. While securityholders may or may not be prepared to support the Board changes proposed by ARA, securityholders can simply exercise their voting rights," Cromwell said.
"Securityholders do not need to accept ARA's offer and sell any of the securities at the lowest possible price."
Shares in Cromwell are down 3.35 per cent to $0.86 per share at 3:05pm AEST.
Business News Australia