Cuffe to head Packer investment group
The departing chief executive ofColonial First State (CFS), Chris Cuffe, has taken on the role of chief executive with CPH Investment Corporation (CPHIC), the investment group owned by Kerry Packer's Consolidated Press Holdings (CPH) group.
Cuffe's new role will become effective from early February, meaning his replacement at CFS, John Pearce, will take on the position of chief executive on an immediate basis.
However in a further twist, CPHIC has proposed a scrip-based merger withChallenger International, in which Packer is a major shareholder. If successful, the merger would give the combined entity a market capitalisation of $930 million.
Under the conditions of the merger, CPHIC would acquire all of Challenger's ordinary shares as well as its convertible notes and options.
The scheme of arrangement for the shares is that CPHIC would exchange 4.5 shares for each ordinary Challenger share.
According to CPHIC, this represents a premium of 17 per cent for the Challenger shares based on their average price over the last week.
The manner of purchase of the notes and options has yet to be agreed upon.
The proposed merger has also resulted in a board shake-up at Challenger, with board members Lloyd Williams, Kerry Packer, James Packer and Ashok Jacob resigning.
Kerry and James Packer, as well as Jacob, all cited conflicts of interest as the reason for their decision. The three will remain as directors of CPH Management and a number of independent directors will be appointed to the board of the merged entity.
They say that in stepping down the Challenger board now only has directors who are not materially interested in or associated in any way with CPH or CPHIC.
The proposed merger, scheduled for completion in April, is subject to approval from Challenger shareholders and CPHIC unit holders, theAustralian Prudential Regulatory Authority(APRA) and the Federal Treasurer.
AUTHOR
Jason Spits
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