John Spalvins scorches Aditya Birla on disclosure Date October...

John Spalvins scorches Aditya Birla on disclosure

Date
October 19, 2015 - 3:44PM

Vocal Aditya Birla minority shareholder John Spalvins has lashed out at the Perth-based copper miner for not keeping investors better informed about approaches from Metals X and called on the board to negotiate a higher price from the hostile bidder.
Mr Spalvins, who has a 1.4 per cent stake in Aditya through his private investment company Galufo, has long criticised the miner's board for poor disclosure, operational management and independence from 51 per cent majority shareholder, India's Hindalco Industries.
Gold and tin miner Metals X launched an $86 million all-scrip off-market takeover offer for Aditya on Thursday evening and, in a letter attached to the bid, claimed to have sought discussions with the board over a potential merger as far back as May.
At Aditya's annual meeting in August, Mr Spalvins asked whether the directors had received any approaches that might lead to a takeover but was declined a response.


"Aditya's silence seems to be the company's policy," Mr Spalvins told Fairfax Media, adding he had sent correspondence to the Australian Securities Exchange on Monday, questioning the company's compliance and whether the regulator would take any action.
Mr Spalvins, one of Australia's best-known corporate raiders from the 1980s and the former managing director of the Adelaide Steamship Company, said the Metals X one-for-five offer significantly undervalued the company's assets.
"The market price does not reflect the value of the company and the underlying value, in my book, would be significantly above a 27¢ bid but, to realise that, Aditya has to come clean, disclose the facts and let other people have a look at the books and figures," he said.
"To me, there needs to be an exit strategy for minority shareholders and I welcome the Metals X bid as part of an exit strategy. Without it, Hindalco will just sit on their 51 per cent and carry on."
Mr Spalvins recognised that the success of the offer obviously sat with Hindalco, which he believed "isn't looking for a bid".
Aditya was contacted for comment. The Metals X bid was met with a "take no action" recommendation from the Aditya board on Friday, which said it would update investors on its decision in due course.
"I doubt they [Hindalco] will welcome it at that price or any price because they are running a bit of a subsidiary but they have an obligation to consider it and make all information available to facilitate it and encourage Metals X to raise their bid substantially," Mr Spalvins said.
Alternatively, Mr Spalvins said, Hindalco "should take out the minority shareholders at a fair price".
Mr Spalvins also reiterated calls from August that the board lacked independence, and minority shareholders should be allowed to elect three directors, without which "it is unlikely that the market will re-rate the company – even if its performance improves".
Aditya's largest minority shareholder, 3rd Wave Investors, has also been a vocal critic of the company's management, disclosure and operational success.
Fortress Investment Group increased its stake in the company to 5.01 per cent on Friday from a holding of 3.2 per cent.
Earlier this month, Aditya appointed Moelis as financial adviser to assist with a strategic review, including the potential sale of the company. It came just weeks after Aditya signed an agreement to sell its Mt Gordon project in Queensland, leaving the Nifty copper miner in Western Australia as Aditya's sole producing asset.


Read more: http://www.smh.com.au/business/mini...disclosure-20151018-gkcbaj.html#ixzz3p1M7gZW8