• Tue. Oct 25th, 2022

A small hedge fund that focuses on small cap Australain gold miners has emerged as a rival in Wilson Asset Management’s high profile bid to acquire defunct telco Amaysim.

Dec 23, 2020

The latter offer would represent a share price of 83.3¢, based on WAM’s closing share price on December 14. By contrast, RAMCap said its offer was worth 85¢ for shares in its less leveraged fund, and 90¢ for its more leveraged fund.
Both offers come after telco giant Optus agreed to buy Amaysim’s core mobile business.
Amaysim already sold its energy business to AGL earlier this year, meaning without the mobile business it has no revenue and will be wound up.
Neither WAM’s nor RAMCap’s offers were counterbids to Optus, but were offers to acquire shares in the company before payment from Optus was received, after which the funds would wind the company up.
Mr Matthews said he approached Amaysim chairman Andrew Reitzer with the offer, but was told by Amaysim’s counsel Alex Feldman that he should first have a meeting with Amaysim’s adviser, investment bank Luminis Partners.
Mr Matthews met over Zoom with Luminis’ Simon Mordant on Tuesday, but was told the offer was inferior to WAM Capital’s, and would not be accepted.
On Wendesady, Mr Matthews wrote to Amaysim’s general counsel complaining about Mr Mordant’s response.
“I reject the following assertion by your adviser Mr Mordant: that there is no liquidity in RAMcap shares: as was elaborated in my recent email to Mr Reitzer, liquidity in RAMcap shares and options will be provided in June and September by RAMcap Limited,” the email read.
“I reject the implication from the statements by your adviser Mr Mordant that RAMcap is a small fund whilst WAM is a billion dollar company, that the RAMcap offer is therefore inferior. We have asserted that a major beneficiary of the AYS board endorsed WAM offer is Mr Geoff Wilson whose investment management company will receive additional fees for management of the funds coming into WAM from acceptors of the WAM scrip bid.
“We pointed out to Mr Mordant that WAM lost $26 million in FY2020 and that $14million in management fees was paid by WAM to Mr Wilsons investment management company in FY202.”
Mr Matthews said the RAMCap board would meet next week, and would likely make a formal offer after that, which he said would be higher than the initial offer.
A spokeswoman for Amaysim confirmed the company had had communications with RAMCap, but had received no further offer. However, she said Amaysim had not said it was not interested in the offer, and was “open for RAMCap to put together a fulsome offer”.
Founded in 2018, RAMCap uses a leveraging strategy to attempt to extract extremely high returns from mostly long investments.
The bulk of its current investments are long positions in junior Australian gold mining stocks, with some short positions in Afterpay, Nvidia and Tesla. Over its two year life it has delivered an average total return of 46 per cent.
Mr Matthews said despite not being a listed company RAMCap could guarantee Amaysim shareholders a cash payment if they chose to divest, but added he hoped many would decide to remain invested in the company.