Allco bid to get Baycorp runs out

Australian private equity firm Allco Equity Partners has chosen not to extend its hostile offer for control of dual-listed debt collector and credit information company Baycorp Advantage.

Having paid A$136 million ($149 million) for a 17 per cent stake, Allco last month offered A$3.50 a share to gain 50 per cent of the company and return A$1.18 a share to shareholders. Last week, it made its bid conditional on gaining 35 per cent.

But late on Thursday night, Allco declined to extend its offer and reasserted its original condition of gaining 50 per cent. By that stage, Allco had secured acceptances of only about 0.1 per cent, taking its stake to 17.08 per cent.

The offer will expire on Friday but as Allco has not declared its offer price final, it may raise it over the next week.

Baycorp shares closed 5c lower at $4.06 on the NZX and 13Ac lower at A$3.59 on the ASX yesterday.

Baycorp's share had been buoyed since Allco's offer by rumours a counter bidder would emerge, while independent valuer Lonergan Edwards valued Baycorp shares at between A$3.92 and A$4.31 each.

John Knox, of Credit Suisse First Boston, which is advising Allco on its bid, said acceptances for takeover offers "always come in late".

"Part of the strategy here is to force shareholders to make a decision and force Baycorp to actually come out and say whether there's another bidder out there."

Knox said Baycorp shareholders had not been able to accept because the company kept suggesting another bidder was waiting in the wings. "Shareholders will always wait to get the highest price."

BayCorp chief executive Andrew Want said yesterdayhe would like to see the issue resolved. "The shareholders, the independent directors, the brokers and the analysts have all given the bidder a message that the price is too low."