Alinta Axes Macbank Over Conflict Rift
The Age
Wednesday January 17, 2007
MACQUARIE Bank has been sacked as Alinta's adviser and its role in a proposed management buy-out is in doubt after the bank refused to endorse conditions imposed by the Perth energy company on managing a conflict of interest.
In a day of dramatic developments in the conflict of interest furore, serious divisions emerged between Alinta and Macquarie that cast doubt over the chances of a management buy-out succeeding - a proposal that has pushed Alinta's shares nearly 20 per cent higher in a week. It shares closed at $13.90 yesterday, up 14?.Alinta "terminated" all Macquarie's advisory mandates yesterday, making it the third scalp from the buy-out team after the plan's architects, chief executive Bob Browning and chairman John Poynton, were forced from their jobs last week following an outcry over conflicts of interest. Keen to pursue a sale of the company, Alinta's independent directors said yesterday they would approve Macquarie working for the management buy-out only if it met several conditions. These included key Macquarie deal makers, including Robert Dunlop and David Roseman, stepping aside from any role in the buy-out because of their knowledge of Alinta's internal plans, gained from a longstanding role as the company's internal advisers. The company also has demanded the return of all privileged Alinta documents. But Macquarie issued a statement that avoided endorsing Alinta's proposed conditions. It said the bank continued to discuss with Alinta "its possible participation". But for legal reasons, Macquarie may have to agree to Alinta's demands if it wants to work for the buy-out team. In attempting to explain the conflict yesterday, Macquarie revealed further corporate governance irregularities.The bank claimed Mr Poynton approached Macquarie on January 2 - while he was still Alinta chairman - requesting Macquarie advise the management buy-out. But at the time, the bank was being paid to advise the company on its internal restructure for the benefit of all shareholders. Mr Poynton told Macquarie all Alinta's directors were aware of the MBO and were receiving independent advice, the bank said. But Macquarie then admitted it took a full week to inform the company it had been approached by the management team. Macquarie wrote to Alinta's independent directors on January 8 with "an indication of Macquarie's interest in considering participating in the proposal", if it was "a friendly approach". Until yesterday, Alinta had declined to comment on whether it had approved Macquarie's role switch. After being dumped yesterday, Macquarie revealed Alinta had replied on January 10 - after the appointment of independent director John Akehurst as chairman - in which the company acknowledged that "Macquarie's intentions are friendly rather than hostile, recognising that Alinta and Macquarie have had a long advisory relationship".Macquarie sources have argued that this constituted Alinta's approval to work for the MBO. In its statement explaining its role in the conflict of interest, Macquarie never commented on whether it considered declining the mandate to work for the MBO team because it already worked for Alinta.
© 2007 The Age