The Takeovers Panel (Panel) advises that it has received an application dated 31 December 2004 from Network Ltd (Network), a significant shareholder of Rivkin Financial Services Limited (RFS), in relation to the affairs of RFS.
Network alleges that unacceptable circumstances existed in relation to control of RFS, caused by the 1 for 3 renounceable rights issue (Rights Issue) recently proposed by RFS, the terms of which are set out in a prospectus dated 24 December 2004 (Rights Issue Prospectus).
The Rights Issue is fully underwritten by Westchester Financial Services Limited (Westchester) and fully sub-underwritten by Central Exchange Ltd (CEL) which is RFS’s largest single shareholder. CEL’s voting power in RFS could increase, at a maximum, from its current 14.9% to 36.2% under the sub-underwriting arrangement.
Network asserts that the Rights Issue should not proceed under the current uncertainty and contention in relation to the ownership, management and control of RFS. It submits that RFS has no urgent need for the funds and the Rights Issue should properly be postponed until after meetings called by Network and another shareholder in RFS, Pinnacle Asset Management Ltd (Pinnacle), have been held in February of 2005 to consider the composition of RFS’s board of directors. Trading in the rights is due to commence on 5 January and the Rights Issue is due to close on 27 January 2005 and allotment of shares on 31 January 2005.
The Panel has not consulted other interested person in relation to the application so has come to no views as to the merits of the application or whether or not to commence proceedings in response to the application.
The President of the Panel is currently looking to appoint a sitting Panel in these proceedings.
Director, Takeovers Panel
Level 47, 80 Collins Street
Melbourne, VIC 3000
Ph: +61 3 9655 3501