With Kerry Stokes in the shadows, Les Chaplin's Pivotal is making a renewed putsch for Nylex.
MANY years ago as Lancelot was heading home along what was then the South-Eastern Freeway, his passenger asked: "Is that the Nylex clock up there?"
His mind on a dwindling share portfolio, and thinking there was one less letter in "cock"-up, Lancelot's response was "yes, it's one of many they've made".
Now the onus is again on the board of Nylex, home of the Esky and various other moulded plastic products, to prove to shareholders that its plan is a better one than the yet-to-be-enunciated ideas of a ginger group trying to take over the boardroom.
What makes this play even more interesting is it seems to have the tacit backing of a man who's not averse to running his own boardroom putsches - Kerry Stokes. Stokes, some will recall, tried to use his 19.5% stake to decant two directors from the board of West Australian Newspapers in Anzac week this year, but was repelled.
Now his Australian Capital Equity, which has had a large stake in Nylex for many years and was represented in the boardroom by Stokes' late, loyal lieutenant, Ken Parker, has granted options over part of its holding. ACE director Brian O'Donnell quit the Nylex board a year ago.
Pivotal Group (Australia) has taken out $2.2 million worth of put and call options with ACE over a 5.1% stake in Nylex - just enough for it to be able to requisition the extraordinary meeting that will now be held in mid-September.
Pivotal belongs to the feisty but assiduously low-profile Sydney entrepreneur Les Chaplin.
Chaplin, who is a great fan and customer of Dick Pratt (and Lancelot suspects has taken Graeme Samuel off the Christmas card list as a result), is less than enamoured of former Nylex chief Alan Jackson and his successors.
Theoretically, Chaplin and Nylex executive chairman Peter George should get on like a clip-on hose and nozzle, because they both describe themselves as company turnaround specialists.
But, judging by the tone of George's letter to Nylex holders telling them the background to Pivotal's board challenge, Lancelot somehow doubts that an era of peace and love will ensue.
Maybe that's because three other members of Nylex's incumbent five-person board also describe themselves as turnaround specialists and George figures one more may be a surfeit. But his greater concern seems to be a lack of detail in the Pivotal plan and that the structure of the option agreements means Chaplin's group has put very little money at risk.
George and his team have been restructuring Nylex since late 2006, which has included new directors and management, raising capital, streamlining structure and products, and throwing all they didn't want into the corporate wheelie bin (they make them too).
Unfortunately, Nylex's own slogan "tough products for a tough country" came back to bite it on the Esky in recent months because its big growth area of water tanks was undermined by too much rain in NSW and Queensland.
After getting itself back to break-even last financial year, Nylex revealed in February that its performance had turned the other way in the December half-year, with losses of
$2.8 million on the bottom line, about double that for the same time a year earlier.
Not long before that - last November - CHAMP Private Equity had begun mulling a buy-out of Nylex and again the Stokes shareholding, plus that of Singapore-based investor Harmony Investment Fund, had tentatively committed to its cause. Harmony, by the way, has two directors on Nylex's board and holds a 12.85% stake. Continued…
