Rich list member and fast food entrepreneur Jack Cowin will perform due diligence on recruitment firm Ross Human Directions and consider making a bid for the company, just days after Malaysian company Peoplebank Holdings made its own takeover play.
Peoplebank, which is owned by Malaysian private equity firm Navitas, made a takeover bid for Ross Human Directions (RHD) in July in a deal that valued the recruitment company at 61.5c a share – a large premium to the where the company’s share price was in June, at about 34c a share.
But Cowin has challenged the terms of the takeover, which included a “lockout” clause that prevented other potential bidders from examining RHD’s books. After a hearing before the Takeover Panel last week, RHD and Peoplebank were forced to amend their scheme of arrangement to allow other bidders of conduct due diligence.
Cowin’s investment vehicle Corom – which currently owns a stake of just under 15% in RHD – will now go in and examine a potential bid.
“The Peoplebank bid was described by the RHD board as being ‘compelling value’ but we think its compelling value to purchase, rather to sell,” Cowin told the Australian Financial Review.
“What we have agreed to do is go in and do due diligence with the view to possibly making an offer, subject to everything checking out as we would think it would.”
RHD’s shares rose to 67c on Friday in anticipation of a higher bid.
A meeting of shareholders to approve the Peoplebank deal is scheduled for November 5, with the deal expected to be finalised by November 19.
At its current share price, RHD is valued at $55.9 million. The company’s largest shareholder is founder and chief executive Julia Ross, one of Australia’s most prominent business women and who was ranked third on SmartCompany‘s list of top female entrepreneurs published in March.
Ross holds just under 42% of the company, valuing her stake at about $23.3 million.
Cowin’s fortune was put at $538 million on BRW‘s Rich 200 in May. His empire, Competitive Foods Australia, owns the Australian rights to Hungry Jacks and KFC and also owns a major food processing business called Comgroup.
But Cowin is also known as an astute sharemarket investor and is currently a director of media group Ten Network Holdings.
RHD’s chairman Allan McDonald was not available for comment prior to publication.
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.
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