The board of the Pollen Street Secured Lending investment (PSSL) trust has snubbed an offer for the fund from Honeycomb as it awaits a decision on a rival bid from Waterfall Asset Management today (11 August).
A battle for control of the alternative finance-focused fund has emerged after Honeycomb revealed it had made a bid for PSSL last week.
Waterfall has been considering making a cash offer for the fund since February and the deadline has been extended five times amid the pandemic so it has time to conduct due diligence.
The latest deadline expires at 5pm today (11 August).
Honeycomb also revealed last week that it had made an offer to merge with PSSL.
Both funds are run by investment manager Pollen Street Capital (PSC).
However, the board said in a stock market update yesterday (10 August) that it does not believe the Honeycomb proposal would command “sufficient support from shareholders” and said Waterfall’s offer would “represent the best outcome.”
PSC has already received a termination notice from the board of PSSL, which is additionally considering appointing a replacement fund manager to manage a wind-down of the fund should a Waterfall takeover fail.
“The board continues to believe that a recommendable cash offer from Waterfall would represent the best outcome for shareholders and it does not believe the current approach from Honeycomb compares favourably in value terms,” Simon King, chairman of PSSL, said.
“Putting in place a well-qualified new investment manager at a reduced cost level will also leave the company well positioned to effect an orderly run-off, which we believe will optimise value for shareholders if an offer for the company is not completed.”