Nicholas Bolton, that pesky Gen Y corporate raider, is back. He’s built a 19.9% stake in struggling property fund Multiplex Prime Property Fund but has requested a shareholder meeting in an attempt to wind the company up, sell its assets and make a tidy profit.
It’s not a new tactic – you might remember Bolton from his raid on Queensland toll road company BrisConnections. He became the largest shareholder in the company after amassing a 19.7% stake for less than $100,000 after the company’s stock plunged to just 0.1c last year.
But he then claimed he was unaware that each unit holder is required to pay a $2-per-share installment to BrisConnections over the next 12 months. That meant Bolton faced a debt of $154 million on his shares.
Bolton then called an extraordinary general meeting of the company in the hope of winding up the company and getting out of paying the installments.
But before the meeting in April, Bolton sold the voting rights to his shares to Leighton Holdings, the major contractor working on the road, for $4.5 million. Leighton then voted Bolton’s shares against the wind-up resolution and Bolton offloaded his shares to a family friend under a prearranged option deal.
Bolton’s Multiplex play is staggeringly similar. Like the BrisConnections shares, the Multiplex shares have a requirement to pay an installment in the next few years – according to The Age, Bolton’s debt is worth over $22 million.
Bolton’s decision to request a meeting to wind the company up follows the fund’s decision to launch a $50 million entitlement offer in order to reduce its debt.
But Bolton isn’t impressed with the offer, calling it a “takeover by stealth” by Brookfield Multiplex, which owns 32% of the fund.
”Investors are being asked to provide further money to keep the company alive,” Bolton told The Age.
“We say there is value in the company that would provide up to 19 cents per unit return to investors if the company were wound up and the assets sold. That calculation is based on independent valuations of the company’s assets.”
If Bolton’s sums are right, and he can achieve his goal of winding up the company and selling off the assets, then he’s going to claim a handy profit of $10.6 million, according to the newspaper. Not bad for an initial investment of $56,000.
There’s clearly a long way to go with this one and it’s too early to say whether Bolton’s plan will succeed.
But love him or hate him – and plenty of people are in the latter camp – Nicholas Bolton is certainly not afraid to take on some pretty big rivals.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
