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Head of Australian sandalwood firm readies bid for own company
March 28, 2017 / 1:01 AM / 9 months ago

Head of Australian sandalwood firm readies bid for own company

SYDNEY, March 28 (Reuters) - Australian sandalwood plantation group Quintis Ltd said on Tuesday its managing director has resigned and will consider making a takeover offer for the company together with an unnamed international group.

The move follows the publication last week of a highly negative report by short-seller Glaucus Research Group that knocked shares in Quintis down 24 percent, taking its market capitalistion to A$430 million ($328 million).

Quintis, formerly known as TFS Corp., is one of the last remaining publicly-listed managed investment schemes in Australia and has Indian and Australian sandalwood plantations. Oil from the trees is sold to India and China for fragrances, cosmetics and medicinal uses.

Shares in the company jumped 10 percent in early trade on Tuesday on news of a potential bid. Managing director Frank Wilson owns about 13 percent of the company and topped up his shareholding with a A$59,000 investment last week when the company came under attack from Glaucus.

The collapses of Timbercorp Ltd and several other large forestry investment schemes, starting in 2009, drew widespread criticism of an investment model which frequently involved small investors borrowing money for high-risk operations.

In response to a query from the Australian Securities Exchange, Quintis said on Monday its biggest customer in China, Shanghai Richer Link, had not ordered any shipments this year.

Chairman Dalton Gooding said in a statement on Tuesday that the fundamentals of the business remained strong, but the company was dealing with “a number of issues” that had affected its share price.

Any offer for Quintis would be independently assessed on whether it was in the best interests of all shareholders, he said.

Wilson said he had received several approaches over the years from parties interested in bidding for Quintis, although none had progressed to a formal proposal.

“More recently, I have been contacted by a well-funded party with what I believe to be a serious approach,” he said in a statement. “It is my intention to fully assess this confidential approach and any others, unencumbered by my duties and responsibilities as managing director.” ($1 = 1.3123 Australian dollars) (Reporting by Jamie Freed; Editing by Richard Pullin)

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