Brierley's Mercantile Investment lifts offer for Adelaide Managed Funds
By Paul McBeth
Aug. 8 (BusinessDesk) - Veteran corporate raider Ron Brierley's latest investment vehicle has lifted its offer for an Australian managed investment scheme in wind-down mode after missing with an opportunistic bid last year.
Mercantile Investments Co is offering 5.5 Australian cents per share in Adelaide Managed Funds Asset Banked Yield Trust for the 87 percent of units it doesn't already own, valuing the investment fund at A$5.18 million.
The offer matches Adelaide Managed Funds' net tangible asset as at June 30, and is an improvement on the 4.8 cents per share bid Brierley made four days before the fund delisted from the ASX.
Adelaide Managed Funds' board advised unitholders not to act until it has considered the offer.
The fund's residual assets are notes backed by loans to agricultural managed funds which held a carrying value of some A$3.6 million and in cash and equivalents of A$1.6 million as at Dec. 31.
The fund's impairment provision against investments was A$9.4 million at the end of 2011, an improvement of A$917,000 from the end of June.
Shares in Mercantile rose 2.5 percent to 8.2 Australian cents on the ASX yesterday, and have gained 18 percent this year.
Mercantile is at least the third diversified investment vehicle for Brierley, who built Guinness Peat Group after being forced out of Brierley Investments in the early 1990s. The empire named for him had struggled to recover from the 1987 share market crash and now exists as GuocoLeisure, with its primary listing on the Singapore stock exchange.
Brierley seized control of Mercantile, then called India Equities Fund, in January when shareholders agreed to a deal giving him 54 percent of the company and its chair in return for his stakes in Copper Strike, Trinity Group, ING Community Living Group, Australian Pharmaceutical Industries and Trojan Equity.
Since then he brought in his old comrades Ron Langley and Gary Weiss via a A$2 million placement.
Last year, the 74-year-old investor told the Sydney Morning Herald he doesn't plan to quit the corporate world any time soon, though the new fund won’t be anything “too big” or “too ambitious.”
Brierley has also reconnected with old colleagues in New Zealand where he emerged as a co-investor with Selwyn Cushing, a former Brierley Investment chairman, in Wellington’s struggling upscale department store and property owner Kirkcaldie & Stains.