By Sarah Thompson, Anthony Macdonald and Tim Boyd
Outspoken fund manager Geoff Wilson has taken aim at ASX-listed investment company Contango Income Generator Ltd and its board.
Not happy with Contango’s plans to change strategies, hire a new manager and raise fresh equity at a big discount to its net tangible asset value, Wilson has fired a curt letter to the Contango fund’s chairman, Mark Kerr.
Wilson said the raising – at a 14.9 per cent discount to the pre-tax NTA – would destroy existing shareholders’ value, and asked Contango to show that it had obtained ASX approval to run the institutional placement.
He also said investors were given only scant details about the plans to switch managers and it should have been disclosed to all shareholders before the equity raising.
“Clearly if the Directors of Contango decided this proposal was in the best interests of all shareholders, you would also consider it to be relevant market-sensitive information which would likely have seen an increase to the Company’s share price,” Wilson said in his letter.
“Why did the current Directors think it appropriate to selectively provide the information in the Term Sheet to participants of the placement only?”
Wilson’s firm owns about a 14.5 per cent stake in Contango Income Generator Ltd and has bid to retain its holding via the placement.
He said if it was a change of manager the company was after, his firm could step up to the plate and have a management proposal ready to go in time for the extraordinary general meeting scheduled for September 18.
It promises to be a busy few days – if not weeks – for Contango’s board. This is not Wilson’s first rodeo…