JOHN KINGHORN is preparing to back down from his plan to delist RHG Ltd, the rump of the failed Rams Home Loans business, after influential corporate governance adviser ISS Governance told shareholders to vote against a controversial buyback.
But Mr Kinghorn, the RHG chairman, is understood to be pressing on with the buyback at 88¢, even though it has been heavily criticised for being below the company's own stated asset value of $1.16 per share.
Mr Kinghorn's move to keep the company listed is seen as an attempt to take the heat out of a campaign by rebel shareholders led by funds managers Geoff Wilson and Karl Siegling.
Shareholders feared they were being forced to accept either a low-ball offer or be forced to stay in an unlisted company paying no dividends.
It's understood Mr Kinghorn is now prepared to keep RHG listed despite fresh suggestions yesterday of concerns at the rate of loans on its mortgage book falling into arrears.
The move comes after ISS Governance told clients it believes the buyback is an attempt by Mr Kinghorn and his son Geoffrey, who between them control about 23 per cent of RHG, to gain control of the company on the cheap.
Investors and analysts have calculated RHG may be worth as much as $2 per share, depending on a shareholder's personal tax situation. Under the proposal, the Kinghorns could see their stake jump as high as 80 per cent by not taking part in the buyback. It's understood ISS believes the Kinghorns should make an offer at least at asset value.
Mr Wilson and Mr Siegling, who between them control more than 10 per cent of RHG shares, have requisitioned a meeting of RHG shareholders to make changes to Mr Kinghorn's planned buyback.
The rebel shareholders are understood to be hopeful of securing at least 40 per cent of the vote against Mr Kinghorn's proposal.
Mr Kinghorn originally planned to return 88¢ per share with those who don't accept being told they will not receive any future dividends with the company also to be delisted. Mr Wilson and Mr Siegling proposed to implement a buyback but keep the company listed before moving to return capital to shareholders.
The profitability of the RHG mortgage book has also seen the former Babcock & Brown boss Phil Green linked to a potential move by Trevor Loewensohn's Alceon Group to bid for RHG's loan book, while NAB is also believed to be interested.
RHG is the rump of the Rams Home Loans business founded by Mr Kinghorn that was floated in 2007 just days before the global financial crisis which saw it collapse. He earned $650 million from the sale. RHG is managing down existing loans which have turned out to be extremely profitable.
