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Allegro passes 90% ownership of Slater & Gordon, names 2 new board directors
Australian private equity firm Allegro Funds now owns almost 94 per cent of Slater & Gordon and has appointed its managing director and a founding partner to the board of the listed law firm, who are looking to help deliver on a “refreshed growth agenda”.
Jerome Doraisamy
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The takeover
On 24 February — following days of media speculation and 48 hours after a trading halt — Slater & Gordon (ASX: SGH) confirmed that the company had signed a bid implementation agreement (BIA) with a subsidiary of Allegro Funds, providing for a recommended off-market takeover for 100 per cent of the listed company shares at $0.55 per share.
A takeover at that price would see the company valued at approximately $78 million, contrary to earlier speculation of a $150 million price tag.
The directors of Slater & Gordon “unanimously support” the offer made by Allegro, the firm said, and recommend that its shareholders accept the offer, in the absence of a superior proposal and subject to independent expert guidance.
“The board has carefully considered the offer and concluded the value and certainty provided provides greater benefit to shareholders than retaining their shares,” the firm said in a market announcement.
Speaking to Lawyers Weekly on the same day, Slater & Gordon chief executive John Somerville said that the day-to-day of the legal practice would continue.
“This is not about turnaround, this is not about restructure. This is about investment for growth,” he posited.
When asked if media reports about expectations that Allegro would recapitalise the listed law firm and execute a turnaround plan were incorrect, Mr Somerville said: “Yes.”
In a letter to the shareholders of listed national law firm Slater & Gordon in early March, private equity firm Allegro Funds has outlined its intentions for the BigLaw practice, should its proposed acquisition proceed.
Allegro increases its stake
In recent weeks, the listed firm has announced various changes in substantial holdings, and now, as of today (Tuesday, 4 April), Allegro has attained an interest in 93.81 per cent of Slater & Gordon.
Allegro has also extended the offer period for remaining shareholders to accept the takeover bid until the evening of Tuesday, 11 April, and — in light of attaining more than a 90 per cent interest — declared its offer to be unconditional.
Furthermore, and as per the BIA, Allegro has moved to appoint one of its founding partners Adrian Loader, as well as its managing director Johan Krynauw, as directors of Slater & Gordon.
In light of this, existing directors Mark Dewar and Merrick Howes have retired from the board, effective immediately.
Slater & Gordon chair James MacKenzie thanked Mr Dewar and Mr Howes for their service and for their “passion”.
“They can certainly take their fair share of the credit for Slater’s turnaround and improved performance since the recapitalisation in 2017,” he said.
Mr MacKenzie also welcomed the two new board members, noting that their arrival heralds “an exciting new chapter” for the firm in its partnership with Allegro.
“All of us at Slater & Gordon are looking forward to working with Allegro to continue to provide access to justice for clients,” he said.
Mr Krynauw added: “We are very pleased to join the board and are excited to be involved in the next stage of the firm’s long and proud history providing equitable access to justice.”
“We look forward to partnering with the existing management team and supporting the firm’s leading group of lawyers to deliver on their refreshed growth agenda and build on Slater & Gordon’s position as Australia’s leading consumer law firm,” he said.
Jerome Doraisamy
Jerome Doraisamy is the editor of Lawyers Weekly. A former lawyer, he has worked at Momentum Media as a journalist on Lawyers Weekly since February 2018, and has served as editor since March 2022. He is also the host of all five shows under The Lawyers Weekly Podcast Network, and has overseen the brand's audio medium growth from 4,000 downloads per month to over 60,000 downloads per month, making The Lawyers Weekly Show the most popular industry-specific podcast in Australia. Jerome is also the author of The Wellness Doctrines book series, an admitted solicitor in NSW, and a board director of Minds Count.
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