Brierley quick off the mark with a trademark raid
Indian summers are often considered a good thing, unless you're the Australian Test cricket team. Or if you're at the receiving end of a trademark corporate raid from Sir Ron Brierley.
Indian summers are often considered a good thing, unless you're the Australian Test cricket team. Or if you're at the receiving end of a trademark corporate raid from Sir Ron Brierley.At age 74, Sir Ron is set to gain control of and chair India Equities after reaching a $8.3 million purchase agreement last month. And already the fund - originally established to invest in shares listed in India before it stopped doing so in July last year - has launched an assault with the hallmark brashness and opportunism often seen in Brierley's heyday.Late on Friday, India Equities (INE) launched an unconditional 4.8? a unit on-market offer, worth about $3.9 million, for all the units it did not own in the Asset Backed Yield Trust (AYT) of Adelaide Managed Funds, a subsidiary of Bendigo and Adelaide Bank.Units in the trust had last traded at 4.4?, and INE's offer ticks all the boxes when it comes to healthy premiums over historical average prices.The twist, however, is that AYT will be delisted on Thursday, as has been the plan since September last year. AYT has liquidated its assets and returned capital to its unitholders, to the point that it now only holds loans made to individuals who invested in the ill-fated Great Southern managed investment schemes.Needless to say, the carrying value of the loans (that is, what AYT expects to be repaid) has been marked down significantly - by about three-quarters - to about $3.8 million.Clearly those in Brierley's camp see some value in the loans that the accountants cannot.With only two days to go, AYT has refused a request to postpone its delisting, arguing the offer fell short of the units' net tangible asset backing of 5.5? a unit. It said the fact that unitholders only had four trading days to consider the offer was "inconsistent with the principles of the Corporations Act".INE validly argues the offer provides unitholders with the certainty of cash in hand rather than the uncertainty of future distributions, and that AYT has historically traded well below its net tangible asset values.But it is arguably banking on the fact that AYT has been too cautious with its provisioning. Just last month, it reduced its provisioning by 17 per cent because of greater than expected recoveries.QUBE RAISINGThe freight and logistics company Qube, chaired by former Patrick chief Chris Corrigan, has made little secret of its desire to expand its transport services to all points of the supply chain - from "pit to port".Having broken into the ASX200 for the first time in September, Qube yesterday announced the completion of a $85 million raising through a share placement, $50 million of which will be taken up by cornerstone shareholder Carlyle Infrastructure Partners. Carlyle's stake in Qube will increase from about 10 per cent to just shy of 15 per cent.In its announcement to the market, Qube said it was "negotiating several acquisitions and investments" across its divisions.One clear option will be to increase its ownership in the Moorebank development site in NSW, on which a large intermodal freight terminal, in close proximity to the M5 and linked by rail to Port Botany, will be built. Qube chief executive Maurice James - himself a former Patrick senior executive - has previously admitted an interest in property group Stockland's 55 per cent share, which has been valued by some at about $200 million.It is all part of a plan to benefit from state governments investing in rail transport services to ports. NSW in particular has had a big problem with freight congestion at its ports and roads, while use of rail for freight has declined steadily in the past five years, in part due to inadequate infrastructure. The $1 billion Moorebank terminal is designed to alleviate the problem. Qube Logistics has also invested in developing infrastructure for handling bulk materials in WA.firstname.lastname@example.org
Want access to our latest research and new buy ideas?
Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.Sign up for free