(Alliance News) - Continuing the saga on Monday, PSC Credit Holdings LLP has called for the appointment of new board members by Pollen Street Secured Lending PLC shareholders.
PSC is Pollen Street Secured Lending's investment manager, though was served 12 months' notice in February over handling of a takeover approach from Waterfall Asset Management LLC. Waterfall is considering a potential 900 pence per share bid for Pollen Street Secured Lending.
Shares in Pollen Street Secured Lending were 3.9% lower at 800.00p each in London on Monday morning.
Pollen Street Secured Lending is currently considering legal action over the PSC's actions surrounding the bid, including a refusal to handover information to be sent to Waterfall, believing its investment manager is trying to intentionally scupper the deal.
PSC has maintained that the information requested by Waterfall is "unusually extensive" for a public takeover offer and could be unwise to hand over since Waterfall is currently a competitor.
Pollen Street Secured Lending has imposed operational restrictions upon PSC, including on entering into new investments exceeding GBP3 million in value or GBP20 million in value in aggregate.
Other restrictions include disposing of investments, entering into new debt or varying the terms of existing debt, and drawing down from any existing facility.
PSC contends that such restrictions are too broad and include "a significant number of the ordinary course transactions" and are much more restrictive than the investment policy already approved by shareholders.
The City Code on Takeovers & Mergers, PSC pointed out, considers transactions of more than 10% of an offeree's assets to be "a material amount", while Pollen Street Secured Lending's restrictions capture all disposals plus any new investment of more than than 0.5% of the assets as at January 31.
PSC has proposed alternative restrictions which would cover net investments amounting to more than 5% of NAV plus monthly reports to the Pollen Street Secured Lending board giving "additional visibility" during the Waterfall offer period.
In PSC's opinion, the Pollen Street Secured Lending board "does not have the expertise, knowledge or relevant authorisations from the Financial Conduct Authority to make decisions" on the company's "day-to-day management".
"PSC therefore encourages [Pollen Street Secured Lending] shareholders to consider appointing their own representatives to the board to ensure the board has the relevant expertise and, if necessary, to lead a strategic review of the options available to PSSL before significant and permanent damage to PSSL occurs," PSC said.
Lindsey McMurray, managing partner of PSC owner Pollen Street Capital, said: "The restrictions imposed by the board are severely restraining our ability to manage PSSL for the benefit of shareholders. It is now time for shareholders to appoint their own representatives to the board to avoid causing significant and permanent damage to PSSL."
By Anna Farley; annafarley@alliancenews.com
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