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Struggling confectionery company Yowie Group (ASX: YOW) has sought to block an attempt by majority shareholder Keybridge (ASX: KBC) to remove its board including CEO and corporate raider Nicholas Bolton, urging the Takeovers Panel to prevent a shareholder vote on the planned resolution.
The move comes as Yowie also tries to buy Keybridge in a one-for-one share exchange that the target has described as of "unclear" value given a "lack of audited accounts and lengthy ASX suspensions".
In an announcement on 16 May, Keybridge recommended its shareholders take no action in response to the "frivolous" bid claiming it would be to their disadvantage, and took umbrage with Yowie's announcement just days earlier that it had raised capital that diluted Keybridge's voting power.
On 12 May Yowie resolved to issue more than 34 million shares - or approximately 15 per cent of issued capital - as a $516,000 private placement to wholesale investors.
A week later it was revealed that Italian-based entity Capelli-Franca had become a substantial holder with 11.68 per cent of Yowie shares.
After the placement reduced Keybridge's voting power from 66.78 per cent to 58.07 per cent, the company claimed it had "serious concerns about the conduct and corporate governance of Yowie", alleging its shareholder funds had been used for the personal benefit of directors.
In the announcement Keybridge said Yowie was "on notice" by allegedly withholding its members’ register, which it claimed had not been provided to Keybridge within the statutory timeframe.
Keybridge also revealed that Yowie was aware of its intention to call a general meeting to replace its directors under section 249F of the Corporations Act.
It has now been almost two months since the Supreme Court of NSW sidelined Bolton from the Keybridge board following a challenge from leading shareholder, Geoff Wilson's WAM Active (ASX: WAA), in relation to two separate meetings on the same day that were led by different investor factions.
Whilst Keybridge was under administration over a loan claimed by Yowie, in April the court validated a February meeting that resolved to remove three directors including Bolton, whose later appeal of the decision was unsuccessful.
The NSW Court of Appeal's ruling also meant that Keybridge was no longer under administration as of 8 May. The following day Keybridge reported it had suspended Bolton’s executive roles at the company pending an internal investigation.
However, when Keybridge called on the Takeovers Panel to cancel or vest Yowie's recent placement shares in ASIC for sale, Bolton wrote a letter to the panel "in [his] capacity as chief executive officer of Keybridge" claiming he had not authorised it and disputed the company's authority to make the application.
It was not clear from the Takeovers Panel announcement whether Bolton had sent the letter before or after the Court of Appeal decision.
Just over a week after it was revealed the Takeovers Panel had received Keybridge's application, once the market had closed on Friday it was reported that Yowie had issued an application of its own seeking orders that Keybridge be restrained from calling a meeting before the takeover offer ends.
Yowie submitted to the panel that Keybridge's plan to hold a meeting failed to disclose that "such an act would frustrate the offer making it unavailable for all Keybridge shareholders".
Yowie claimed there was no urgency or probative reason why Keybridge would need to convene such a meeting "other than to frustrate the offer, to the prejudice of Keybridge shareholders, or otherwise before it obtains the approval of its own shareholders allowing it to trigger a defeating condition".
The chocolatier also submitted that the acquisition of control over Keybridge "is not taking place in an efficient, competitive and informed market, contrary to section 602".
The Takeovers Panel has not appointed a sitting panel or commented on the merits for either application.
Yowie has also reported that US trade tariffs have imposed "ongoing uncertainty" on the company, given it sources approximately US$2.5 million worth of toys annually from China - a country now subject to high tariffs in the US, Yowie's largest market.
Keybridge sets record straight
This afternoon Keybridge released a clarification to set the record straight on a past announcement released when the courts were yet to officially recognise the group's board change.
In early March when Australian Style nominee John Patton was acting as company secretary, Keybridge reported that in a spill event on 27 February shareholders voted to re-elect Patton to the board with 62.59 per cent in favour and 37.41 per cent against.
However, under the refreshed board the company has today reported the spill event was invalid as Patton, Bolton and another Australian Style nominee, Richard Dukes, had been removed as directors on 10 February.
Nonetheless, Keybridge has released results today claiming that if the resolutions at that meeting were decided by poll, 60.14 per cent of votes would have been against Patton.
"For the avoidance of doubt, Keybridge confirms that Mr Patton is not a director of Keybridge," the company states.
"The purported chairperson of the Spill Event (who was not a director of Keybridge) invalidly excluded the votes of Keybridge shareholders."
It was a similar story with Antony Catalano, who Keybridge previously reported as having 59.1 per cent of votes against his re-election at the spill meeting. The updated voting results show he would have had 62.27 per cent of votes in his favour.
Keybridge reaffirms its directors as Geoff Wilson AO, Jesse Hamilton, Martyn McCathie, Sulieman Ravell and Antony Catalano.
How the Keybridge and Yowie saga has played out
13 March 2019: Investment firm launches $20 million takeover bid for Yowie
3 May 2019: Keybridge ditches takeover of underperforming Yowie
30 July 2019: Corporate raiders come knocking at Yowie's door
5 August 2019: Yowie escapes coup as Bolton and Khan clash over Keybridge
20 September 2019: Setback for Farooq Khan in bid to oust Nicholas Bolton from Keybridge Capital
14 October 2019: Bentley backs Wilson's takeover bid for Keybridge
15 October 2019: Nicholas Bolton bolstered in battle for Keybridge
9 December 2019: Orders sought against Wilson and Bentley over Keybridge shares
16 December 2019: Wilson lowers takeover offer for Keybridge
8 January 2020: Bolton's Keybridge Capital receives yet another takeover offer
22 January 2020: Board directors ousted in Keybridge shake-up
29 April 2020: As Keybridge shakes up Yowie, Wilson shakes up Keybridge
3 June 2020: Keybridge hits Wilson with lawsuit, Catalano offers to buy shares back at a premium
5 June 2020: Wilson slams Catalano's "opportune" Keybridge share buy-back offer
30 June 2020: Keybridge launches takeover bid for RNY Property Trust
6 July 2020: ASIC grants Wilson permission to proceed with Keybridge takeover
13 July 2020: Catalano improves his offer for Keybridge shares
27 July 2020: Keybridge returns to the Takeovers Panel to block Wilson bid
2 September 2020: Legal costs weigh down Keybridge Capital
14 October 2020: Nicholas Bolton launches third attempt to secure seat on Yowie board
4 January 2021: Wilson triumphs over Bolton's Keybridge Capital in the Supreme Court
31 August 2023: Yowie plucks one of Australia's oldest chocolate companies Ernest Hillier from administration
2 January 2024: Keybridge Capital eyes $10.8m cash kitty with $7.4m takeover bid for Yowie
15 April 2024: Nicholas Bolton's Keybridge becomes majority owner of Yowie
23 May 2024: Corporate raider Nicholas Bolton appointed CEO of Yowie Group
10 February 2025: Keybridge appoints administrators after investee Yowie calls in $4.6m loan
1 April 2025: Corporate raider Nicholas Bolton kicked off Keybridge board in coup for Geoff Wilson
11 April 2025: Yowie faces $5.8m tariff blow as Keybridge loan woes linger
9 May 2025: Yowie moves on Keybridge as Bolton ousted in corporate shakeup
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