ASX-listed print company Ovato has called an Extraordinary General Meeting of shareholders next month for a vote on the company’s plan to sell its Retail Distribution business to Are Media (formerly Bauer Media) for $15 million.
Ovato announced the move last week as part of a restructuring plan that included the appointment of James Hannan as the new CEO and MD, replacing Kevin Slaven. The company is also selling off its Marketing business, as it seeks to “bring its focus back on print.”
Ovato and Ovato New Zealand have entered into a binding sale agreement to sell Ovato Retail Distribution and Ovato Retail Distribution NZ to Are Media Limited for A$15 million in cash. Are Media would also accept “a negative working capital position of approximately A$27 million,” Ovato said.
Are Media is a 16.4% shareholder of Ovato. The major shareholder of Ovato, the Hannan family, who collectively hold 43.4%, has indicated its support for the deal, and Ovato’s board has recommended that shareholders support the transaction.
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"The business will bring its focus back
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Ovato chairman Michael Hannan said: “The sale of the Retail Distribution and Marketing Services businesses will greatly assist in providing Ovato with cash reserves for ongoing transformation and will be the catalyst for a significant flattening of the corporate costs starting from the top with immediate savings being realised by not replacing any departing member of the leadership team.”
Six members of Ovato’s senior management team will reportedly be leaving the company over the next few months.
The shareholders’ meeting will take place at 10.30am (AEST) on July 15, 2021. Due to the ongoing pandemic, the meeting will be held online.
If shareholders approve the deal, it’s expected to be completed by the end of July 2021.
