However, on Friday, Humm and Latitude said they had mutually agreed to abandon the proposed sale due to major disruption in the markets.
On Tuesday night in a letter to shareholders released publicly to the market, the majority directors lashed out at Abercrombie and his “strident campaign” against the proposed sale.
“Much of the commentary he published was emotion-driven, inflammatory, and provided little clarity on what precise future strategy he envisages for Humm Consumer Finance (HCF), or on what basis he believed Latitude were going to pay more for HCF,” the majority directors said.
“Some of the information he published was false and misleading, which we instructed him to take down from his website. He persisted in telling shareholders to vote against the transaction. There is still essentially no clarity on the future strategy he envisages for HCF.”
The directors said that the value of the sale had dropped since the board had recommended it earlier this year, because of the drop in Latitude’s share price.
Latitude had offered $35 million in cash and 150 million in Latitude shares, meaning the deal was worth around $245 million last week. An independent expert had assessed the equity value of Humm’s consumer finance business to be in the range of $260 million to $308 million.
“Given this, the Majority Directors asked Latitude to improve the terms of its offer, which it refused to do. Public pressure from Humm shareholders threatening to side with Andrew Abercrombie and vote down the transaction had no impact on Latitude’s position, which was unsurprising given the deteriorating economic environment, crashing sector stock prices and lack of any alternative bidding interest,” the directors said on Tuesday night.
“The Majority Directors believe Andrew Abercrombie overplayed his hand quite fundamentally in a transaction that could have been very beneficial for shareholders. The near 30 per cent increase in the Humm share price to 93c when the transaction was first announced underscores the initial very positive market assessment of this deal before his negative campaign began.”
The majority directors said they still saw strategic merit in a deal with Latitude, and had worked in the best interests of shareholders at all times.
“This was the entire board of highly experienced people acting unanimously in all these decisions, excluding one lone dissenting director.”
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