Mariner, Austock deal under a cloud
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Kate Kachor is a journalist with InvestorDaily, a Morningstar publication.
In a statement to the Australian Securities Exchange, the Mariner board said Austock's talks with Folkestone Limited regarding the potential sale of Austock's property funds management business may alter its decision to bid for Austock.
According to media reports yesterday, Austock is in discussions with Folkestone about a joint venture to run its $444-million property funds platform, the statement said.
"The board of Mariner hereby advises shareholders that the trading halt and any potential sale or joint venture relating to any part of the Austock business may impact on our intention to make an offer to purchase all of the shares in Austock, as first announced to market on 25 June 2012," it said.
"Austock advise that they expect the trading halt to be ended upon release of a subsequent announcement. Mariner is concerned about the circumstances of the trading halt and impending announcement."
As part of its concerns, Mariner said a "clear contradiction" has been made in representations by Austock chief executive Bill Bessemer and the company's recent ASX announcements, specifically the future of Austock's property funds management business.
"There is no clarification or previous disclosure about whether Austock has already entered into a heads of agreement, due diligence or other arrangement with Folkestone," Mariner said.
"If Austock is entering into any specific dealings in respect to the property funds management business, then when will that be put to shareholders given it forms a substantial part of the overall Austock business?"
The Mariner board intends to seek "specific answers" to their concerns directly from Austock, the statement added.
News of a possible agreement between Austock and Folkestone comes amid back-and-forth comments from Austock and Mariner.
On Tuesday, Mariner announced it would continue its takeover of Austock after shareholders expressed frustration about the poor performance of their shares and company management.
On Monday, Bessemer urged the Mariner board to withdraw its bid, stating the deal was "fundamentally flawed".
The offer had the potential to proceed if Mariner addressed key concerns, Bessemer said.
The future outcome of a possible Austock and Mariner deal may be known early next week when Austock's trading halt is lifted on 9 July.
Austock's core business now rests with its $850-million funds management units: Austock Services, Austock Property and Austock Life.
Austock Property, led by Nick Anagnostou, manages $558 million across four funds, while Austock Life continues to expand under Ross Higgins, with funds sitting at $295 million as at 30 April.