Major Diverger shareholder slams COG bid
A major Diverger shareholder has picked a fight with interloper COG Financial Group.
In an interview with Street Talk, Armytage chairman and portfolio manager Lee IaFrate, whose activist fund held 9.4 per cent of Diverger ahead of COG’s bid, branded the competing non-binding proposal as “conditioned to the hilt” and “deplorably opportunistic”.
Armytage chairman Lee Iafrate expects to see more consolidation in the ranks of Australia’s micro cap financial services players. Eamon Gallagher
The ASX-listed licensee services group has already agreed to be acquired by rival financial services outfit Count Limited at $1.14 per share in cash and scrip.
“These non-binding indicative offers… they’re gutless, they don’t require you to have the conviction of your own research, your market intelligence, your own advisers,” IaFrate told Street Talk.
“COG is asking for full-blooded disclosure – they get to see all the company’s private information, their trade secrets, and their intellectual property, for nothing, and then they can decide whether they want it to be binding. The buyer is running an option. It’s deplorably opportunistic… I wouldn’t recommend putting Diverger through a program like that.”
Getting down to the specifics of the bid, IaFrate pointed to the $10 million capital raise that COG would be required to undertake to finance the bid, questioning how it would be funded. He wouldn’t be surprised to see Count back with an offer around the $1.25 mark, noting Diverger’s stock price is now trading above Count’s $1.14 bid – leaping 17 per cent to $1.23 on the day the COG bid was confirmed and settling around $1.18.
“We’re thrilled other parties see value, and we’re happy with the premium COG are offering, but their bid is
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