Listed (ex-Telstra division) outfit Commander Communications has made an off-market pitch for Volante.
However, the cash offer of$1.01 per share falls well short of what stock holders could sell on market, forcing Commander CEO Adrian Coote to defend the recently issued Bidder’s Statement.
“Clearly, the Offer presents Volante shareholder’s with the certainty of cash in exchange for an uncertain future with Volante,” he said in a release adding that he believes the Offer is ‘fair and appropriate’ and rejecting the notion it was ‘opportunistic’.
Volante shares hit a low of $0.65 in mid December but have since recovered to $1.08 since the announcement of the hostile takeover bid. However, when the offer was initially made it represented a 15 per cent premium on the share price.
Commander points out that its offer still represents a 25% premium to the volume weighted average share price of Volante in the month prior to announcement of the Offer, but it’s well below the $1.40 price tag the shares were trading at in early november before the company issued an earnings downgrade warning to the ASX.
“Volante has significantly underperformed the market and its peers over the past three years,” Coote said. “A $1,000 investment in Volante stock purchased on 23 December 2002, was only worth approximately $984 on the day prior to announcement of the Offer. This is after assuming that dividends received were reinvested into the company at the closing price on the date of payment.”
The total number of Volante Shares on issue at the date of the Offer is 128,428,610 which would translate to a buy price in the region of $130 million.
Following the earnings downgrade Commonwealth exited its substantial holding in the company and Perpetual Trustees also sold down its equity position, although the latter remains a substantial shareholder with some 12 per cent of the company.
Throughout December directors Robin Crawford, Chairman and Ian Penman, CEO both invested heavily in company stock at less than a dollar with Penman’s spouse also raising her equity in the company.
The company has issued a statement to shareholders suggesting they withhold any decision while the board reviews its position.