Back to the drawing board for Bolton as Magellan wins vote reprieve

afr.com:

It’s back to the drawing board for Keybridge Capital’s Nick Bolton. Magellan Financial Group’s legal challenge to block Bolton’s push for a meeting of unitholders in its $2.65 billion Global Fund was successful.

Magellan Financial Group executive chairman Andrew Formica. Louie Douvis

The decision, handed down late on Wednesday evening in the Supreme Court in Sydney, ruled Bolton’s pathway invalid and ineffective – a blow to the activist investor’s efforts to wind up the fund. Magellan will not be required to comply with the meeting request.

Bolton is not calling it quits and will call for a different meeting to replace the responsible entity using the same section of the Corporations Act. “To design a clause that deliberately restricts the way in which members can call a meeting is a disgrace,” he told Street Talk after the decision. “Magellan have lost the right to manage this fund and need to be removed.”

Magellan challenged Nick Bolton’s right to convene a meeting of unitholders in its closed-end fund on October 20, asking the Supreme Court to rule whether the activist investor’s meeting request was valid.

Bolton’s listed vehicle Keybridge advised the responsible entity behind the Magellan Global Fund that it had gathered the 100 unitholder signatures required to call a meeting.

Magellan asked the court to decide whether the request complied with a rule which requires holders representing 5 per cent of votes.

Keybridge Capital’s Nick Bolton. 

Bolton emerged as an option holder in the Magellan Global Fund in June and has been agitating for a wind-up or conversion ahead of the options expiring in March.

In October, Magellan said it intended to convert the strategy into an open-ended fund in “the first half of calendar