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Allegro to acquire remainder of Slaters shares, suspend trading
Slater & Gordon will likely stop trading on the ASX as early as Monday next week, as Australian private equity firm Allegro Funds now owns more than 97 per cent of the national plaintiff firm and is exercising its right to compulsorily acquire the remaining shares.
Jerome Doraisamy
The takeover
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.
Compulsory acquisition
By early April, Allegro had surpassed a stake of 90 per cent ownership in Slaters and thus moved to appoint two new board directors for the plaintiff firm — one of its founding partners, Adrian Loader, as well as its managing director, Johan Krynauw.
As of last Wednesday (12 April), the PE firm had acquired 97.42 per cent of Slaters.
Now, with the offer to acquire shares having closed and Allegro having acquired almost the entirety of Slaters, it has — as of this morning (17 April) lodged a compulsory acquisition notice with the Australian Securities and Investments Commission and has sent a letter to Slaters shareholders detailing its intention to exercise its right to acquire the shares which it did not receive acceptances for prior to the closing of the offer.
It also intends to acquire any shares issued, due to conversion or exercise of any SGH convertible securities, in the period six weeks after the compulsory acquisition notice.
All such shares will also be acquired for $0.55 each, the PE firm wrote.
Following this, the letter to shareholders continued, trading in SGH shares on the ASX will be suspended, likely on Monday, 24 April.
Once the compulsory acquisition process has completed, Allegro said, it will pay SGH the consideration of any shares it has compulsorily acquired.
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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