Investor and market veteran Anton Tagliaferro has raised significant concerns regarding the governance of Humm, a consumer finance group. He lodged an application with the Takeovers Panel on December 15, 2023, challenging chairman Andrew Abercrombie over his recent stock purchases while a takeover offer from Credit Corp was active. Tagliaferro’s application claims that Abercrombie’s actions undermine the “fair treatment” of investors and breach the Corporations Act.
The application, which was revealed by the Australian Financial Review, criticizes the Humm board’s management of the takeover bid and alleges that Abercrombie acquired an additional 15 million shares from December 17, increasing his ownership stake to over 29 percent. Tagliaferro, who holds over 4.9 million Humm shares through various entities, including Akat Investments, argues that Abercrombie had an “informational and positional advantage” regarding the company’s state and the Credit Corp offer of $385 million.
The application was summarized and submitted to the Australian Securities Exchange (ASX) on December 19, 2023. The Takeovers Panel consists of experienced professionals, including investment bankers and lawyers, who adjudicate on matters relating to corporate governance and takeover bids.
Tagliaferro’s accusations stem from Abercrombie’s access to a detailed information pack concerning Humm’s business and earnings projections before he made his purchases. This pack, which spans approximately 100 pages, was reportedly received around December 12, just days before the stock acquisition began.
Tagliaferro has expressed his frustration over the board’s performance, stating that in his 45 years of investing, he has never encountered a situation where a director owning nearly 30 percent of a company held such “undue influence.” He emphasized the board’s duty of care towards all shareholders, a responsibility he feels has not been adequately fulfilled given Humm’s stock performance, which has seen a decline of 43 percent from a five-year peak in 2021.
The upcoming extraordinary meeting, scheduled for January 2024, will address Tagliaferro’s concerns and is backed by activist investors from Raper Capital and Collins Street Asset Management, who are pushing to remove three board directors, including Abercrombie.
In response to Tagliaferro’s application, a representative for Humm declined to comment, while Abercrombie has yet to address the allegations. The board has previously defended its actions, asserting that Abercrombie’s trading complied with applicable legal requirements and the company’s securities trading policy.
Tagliaferro’s application requests that the Takeovers Panel prohibit Abercrombie from voting the newly acquired shares at the upcoming extraordinary meeting. Additionally, it calls for increased transparency regarding the Credit Corp offer and the formation of an independent board committee to review the bid. This request is partly motivated by Tagliaferro’s assertion that Abercrombie’s previous offer of $286 million received more engagement from the board compared to the current bid from Credit Corp, which has not yet been granted access to a data room for due diligence.
As Humm’s stock closed at 75.5 cents on December 19, 2023, it has shown a slight increase of 7.9 percent this year, despite the significant downturn over recent years. The unfolding events at Humm reflect ongoing tensions in corporate governance, with potential implications for investor confidence and market integrity.
