Withholding of dividend payment from Crescent Capital Partners
Crescent Capital Partners has not reimbursed Abano for expenses incurred by Abano in connection with Crescent’s failed takeover offer.
The Takeovers Code imposes an obligation on Crescent to reimburse Abano for its expenses in these circumstances. Despite repeated requests for payment, approximately 80% of Abano’s takeover costs remain outstanding, some costs since January 2008.
Accordingly, to protect the interests of its shareholders and in an attempt to bring this matter to resolution, Abano withheld from Crescent the 13c per share dividend recently paid by Abano to shareholders, and applied this amount towards payment of the outstanding expenses.
As evidence of good faith, and on a without prejudice basis, Abano has arranged for $100,000 of the outstanding sum of $603,202 to be placed in a separate bank account should there be any bona fide dispute.
Crescent has now issued legal proceedings against Abano for payment of the dividend. If this action proceeds, Abano will commence its own legal proceedings for recovery of the outstanding takeover expenses.
Abano intends to approach the Takeovers Panel formally, to request the Panel consider the issues relating to Abano’s takeover costs with a view to ruling as to Crescent’s non-compliance with its obligations to pay the costs, under the Takeovers Code. Abano has previously approached Crescent and continues to seek Crescent’s co-operation in resolving the matter in this forum which Abano considers likely to be more time and cost-efficient for all parties.
The board of Abano notes that the costs incurred by the company in respect of the Masthead offer were of a similar amount and were paid by Masthead without dispute.
The Abano board notes that the delay in reimbursement of Abano’s expenses is a cost to Abano and all its shareholders.