AUSTRALIAN FINANCIER Rob Topfer has threatened to withdraw his unsolicited approach for Eircom parent Babcock Brown Capital (BCM) if the company’s shareholders approve a proposed remuneration and termination package for its new chief executive at a meeting next Monday.
Mr Topfer, the driving force behind the acquisition of Eircom in 2006 by BCM’s now bankrupt parent, Babcock Brown, is facing resistance from the BCM board over the takeover proposal advanced last week by his vehicle, TaemasBridge. In addition to a remuneration package for BCM chief executive Andrew Day, BCM shareholders are to vote on a plan to sever its link with Babcock.
Mr Day’s employment agreement, which is for a fixed term of two years, includes a basic salary of A$900,000 (€453,548).
He will also receive a short-term incentive payment worth up to 65 per cent of his base salary if he achieves certain performance-related targets and he stands to receive 1.5 million “share performance rights” in BCM, which will vest if there is a change of control of BCM.
However, Mr Topfer is fighting that proposal.
“TaemasBridge does not believe that it is appropriate to continue with its current proposal where those resolutions are passed,” he wrote in a letter to BCM chairman Kerry Roxburgh.
“BCM shareholders should be made aware that in those circumstances the TaemasBridge proposals will be automatically withdrawn.”
The manoeuvre represents an escalation of tension between Mr Topfer and BCM, which has pledged to return most of its remaining cash to investors if no buyer emerges within two months.
This was seen as an implicit attempt to partially block Mr Topfer as such a return of cash by BCM would all but eliminate the reserves he planned to return to shareholders under his proposal. He would have to cut his bid price as a result.
