AN attempted takeover of exhaust manufacturer Berklee has fallen through, casting the Ballarat company’s future viability into question.
A bid group associated with Rick van Berkel, a non-executive director of the company, had proposed last year to acquire all shares not already held by the group.
But, in the company’s latest announcement last week to the Australian Stock Exchange, Berklee chairman Alan Beckett confirmed the bid group had withdrawn its proposal.
“The reasons given were that several conditions have not been met, specifically that they have not been able to raise the finance to acquire the shares and that the financial performance of the company continues to deteriorate,” he said.
“Your board now has no alternative but to seriously consider the ongoing viability of the company’s business in these extremely difficult times for locally manufactured auto industry suppliers.”
Berklee, an automotive exhaust manufacturer with about 28 staff, recorded a loss of $2,149,000 in 2012, following a loss of $2,228,000 in 2011.
The company could now consider a new proposal by managing director and secretary Brett Jones.
If no alternatives were received by the close of business on Friday, Berklee would negotiate exclusively with Mr Jones over his proposal to “takeover the supply and distribution of the Berklee product, intellectual property and exhaust inventory”.
Mr Beckett said the automotive parts and accessories manufacturing industry continued to encounter many challenges, in his address to the company’s 2012 annual general meeting,
Strong competition from cheap imports and the strong Australian dollar were key reasons.
He foreshadowed 2013 as “another year of continuing restructure” for Berklee, which has already closed branches in Queensland, NSW and Western Australia.
rachel.afflick@fairfaxmedia.com.au