Henry plays Hydromet takeover hardball after securing 25%

BUSINESSDESK: Chempro Logistics director Simon Henry won’t budge on his offer to buy ASX- Hydromet Corp after securing acceptances that take his stake to almost a quarter of the listed industrial waste recycler.

Mr Henry, who is the sole director local chemical logistics firm Chempro, won’t lift his 4.8 Australian cents-a-share bid, after securing a further 8.2% from Chinese investor Chunxing Group almost immediately after he made his offer last week, he said in a statement to the ASX.

That took his stake to 24.9%, making him Hydromet’s biggest shareholder.

“The offer providers Hydromet shareholders with certain cash liquidity and is at a healthy premium to the prices at which Hydromet raised capital at the start of the year,” he said.

“I want to ensure there is no expectation by Hydromet’s directors that I might increase my offer. This will not occur.”

Hydromet’s directors this week urged shareholders to hold off accepting the offer, saying “any shareholder who sells their shares in the market in the immediate future may lose the ability to benefit from any increased bid by Mr Henry or to participate in a rival bid, should any such bid be made”.

The company has retained Scott Malcolm of Greenstone Partners as its financial adviser and Gavin Robertson of Kemp Strang Solicitors for legal advice.

The bidder statement claims Hydromet shareholders haven’t been served well, receiving cumulative dividends of $A2.6 million in five of the past 11 years, whereas directors’ total remuneration was $A9.4m over the same period at an annual growth rate of more than 11%.

Mr Henry has no minimum acceptance condition, and will seek to review the company’s operations, management and governance.

If he achieves 90% acceptances, enough to force a mandatory takeover, he will delist the company, and may reorganise its assets with other companies he controls.

That could see Chempro Logistics come into play, which is in the process of installing a used lead acid battery recycling plant in Wellington.

It is recently moved into chemicals trading, opening a procurement office in China.

Hydromet shares were unchanged at 4.8 Australian cents on the ASX yesterday, valuing the company at $A28.8m.