Allco has plans for board shakeup

Listed investment company Allco Equity Partners will declare its bid for Baycorp Advantage unconditional at 35 per cent in conjunction with shareholder support for a board shakeup.

Allco said yesterday that having reviewed Baycorp's target statement, it believed decisive action was required to overturn four years of ineffectual leadership of the debt management firm.

Rejecting the independent Baycorp-commissioned Lonergan Edwards valuation - which valued the company's shares at A$3.92 to A$4.31 - as "wishful", Allco outlined a list of changes it wants to make at Baycorp.

These include changing the composition of the board at its next general meeting to include four Allco nominees and removing five current directors.

It would also introduce a Baycorp shareholder alliance facility that would allow institutional shareholders to show their intention to vote in favour of Allco's proposed changes to the board by lodging proxies.

On Wednesday, Baycorp recommended that shareholders reject Allco's takeover bid, labelling it "materially inadequate".

Although potential further value could be created for Baycorp shareholders, Allco believed this was only likely to be achieved by a revitalised board led by an activist shareholder such as itself.

Allco chairman David Coe said Baycorp directors admitted in the target statement to not knowing "if a superior offer will arise" and conceded that, in the absence of the Allco offer, the Baycorp share price might trade below the $3.50 offer price.

"Now the target statement is out, it is clear shareholders have a simple choice. They can choose to support the existing leadership, which has over-promised and under-delivered, or they can support Allco's offer for a reinvigorated Baycorp," said Coe.

"We want to begin our programme for change at Baycorp immediately, including having our proposed capital return put to shareholders for approval as soon as possible."