Allied minority shareholder, Nightingale Partners, has made an off-market, cash takeover bid for the services company in an attempt to quash a merger agreement with LongReach.
The proposed deal sees Nightingale offer at least $0.18 per share for 60 per cent of shareholder interest in ASX-listed Allied. The company claimed this represented a 39 per cent premium to the price imputed to each Allied share through the proposed merger with LongReach. The deal would raise Nightingale's stake from 14.7 per cent to a 50.1 per cent hold on Allied's capital.
Nightingale director, Larry Case, said the bid was a desperate attempt to grant shareholders a say in Allied's fate before the LongReach deal was sealed.
"Allied has not given shareholders any chance to vote on LongReach, so the only way we can stop the bid is to make a bid ourselves," he said. "We see this proposed merger as a very negative step."
Allied announced its intention to merge with point-to-point wireless and intelligent switch vendor, LongReach, in June. The agreement was based on Allied shareholders receiving 2.5 shares for every share held by current LongReach shareholders, and would leave LongReach with a 57 per cent stake in the company. It is expected to be completed by the end of September.
At the time, Allied chairman, Michael Allison, claimed the two businesses had complementary interests in defence, intelligence and security. In contrast, Case claimed the merger undervalued the Allied business while overvaluing LongReach.
"If you put together two companies that are performing like these two are, they're unlikely to go anywhere," he claimed.
Nightingale was willing to raise its offer further if able to conduct due diligence on the business, Case said. He added Allied's current biggest asset was its capital, resulting from the $9.5 million sale of subsidiary, TUSC Computer Systems, to Ericsson in November.
"The problem is that there's no certainty that this money hasn't been spent, which is why we need a better understanding of the business," he said. Nightingale planned to lodge its bidder's statement within the next three weeks.
In response, Allied chairman and managing director, Michael Addison, said it was now considering the terms and conditions of the proposed offer. It hoped to make an announcement in the coming days.
Allied shares were trading at just over $0.15 at the close of play on August 30.