360 Capital Launches Takeover of Evans Dixon

27 October 2020

360 Capital Group announces today that it has made a proposal, to acquire via off-market takeover offer the troubled Evans Dixon Group in a cash and script proposal.

360 Capital currently owns 19.55% of shares in Evans Dixon Limited and the offer valued Evans Dixon at $0.61 per share, based on the closing price of TGP stapled securities of $0.835 on 26 October 2020.

The offer is for $0.40 per share plus one TGP stapled security for every four Evans Dixon shares or part thereof, less any dividends declared or paid.

360 Capital believes the Offer Price represents compelling value for ED1 shareholders. The Offer Price represents:

  • 142% premium to the Company’s most recently reported Net Tangible Assets
  • 35% premium to the average price in which the Bidder purchased its last portion of its 19.55% stake, approximately 6 weeks ago
  • 54% premium to the trading price shortly after the Company disclosed ASIC was taking corporate action against Dixon Advisory and Superannuation Services Limited (Dixon Advisory), a subsidiary of the Company.

The trading price of Evans Dixon has decreased 79% since the Company’s IPO in May 2018 and 360 Capital believes that the offer represents a compelling opportunity for shareholders to exit their investment before any further value destruction, including arising as a result of the ongoing ASIC proceedings against Dixon Advisory.

The court action by ASIC related to financial advice given to clients to invest or retain exposure to its troubled US Masters Residential Fund, or URF, which paid significant fees to related companies but performed poorly for investors.

In total 126 alleged breaches by representatives were identified relating to 51 instances of advice provided by Dixon Advisory. ASIC said these breaches carried a maximum penalty of $1 million per instance before March 2019 and $10.5 million per instance after that date.

In 2017 Dixon Advisory merged with Evans & Partners to create Evans Dixon which listed on the ASX in 2018. But the group has been plagued by the Dixon Advisory issues since it listed forcing the group to abandon remove the related party issues by preferencing external product.

Former CEO Alan Dixon, sold his 16.7% stake to 360 Capital in July 2020.

As the major shareholder, 360 Capital are concerned now that Evans Dixon are providing themselves rights to increase control over the group via a forthcoming AGM resolution.

360 Capital offer is therefore conditional on Evans Dixon withdrawing Resolution 6 at the AGM or that Resolution 6 if voted on, is not passed, by shareholders at the AGM.

360 Capital will await a response from Evans Dixon before proceeding to provide further information to shareholders.