PSSL threatens Pollen Street Capital with legal action to obtain documents
Pollen Street Secured Lending (PSSL) has hit back at Pollen Street Capital and is threatening legal action to obtain due diligence materials.
In a punchy letter to shareholders, PSSL chairman Simon King said that PSC is trying to ensure that Waterfall Asset Management’s bid will not proceed.
In January, Waterfall made a possible cash offer of 900p per PSSL share, backed by PSSL’s largest shareholder Invesco.
As part of the due diligence process, PSSL asked PSC to populate the so-called data room with documents. PSSL has today claimed that the documents are “heavily redacted,” are “historic and/or irrelevant” and “it would seem that it largely relates to just a small proportion of the company’s portfolio.”
“In short, the data room is of no meaningful use whatsoever and a complete waste of time. As you may imagine we are pretty fed up with this and you should be too.”
The investment trust said that it wants to access the documents to decide on what is appropriate to share with Waterfall. “To suggest otherwise is complete nonsense and just a smokescreen to justify more and more unnecessary delay.”
The board said it anticipates it will need to commence legal proceedings “to enforce its rights, including potentially issuing a court claim to obtain due diligence materials”.
Lindsey McMurray, managing partner of Pollen Street Capital, said: “We stand ready to move this forward at any time. We will continue to act in the best interests of all shareholders.”
PSSL has also claimed that they had been blindsided by the early release of information about its dividend policy.
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The investment trust said: “We did not know about the announcement until after it was published. We had not as a board agreed to increase the dividend.”
On Monday, PSC issued a statement refuting PSSL’s claim that PSC had made “serious, repeated and ongoing breaches” of the IMA.
McMurray said: “Despite numerous attempts to provide expert advice and propose a practical approach since learning of the Waterfall proposal, the Board has refused to engage with us constructively and now risks endangering shareholder value.”
In response to today’s statement, Waterfall said: “Waterfall confirms that its position as set out in its Stock Exchange statement on 25 February 2020 is unchanged and it is hopeful of receiving the requested information from the Company to complete confirmatory due diligence.”
Invesco’s co-head of UK equities, Mark Barnett, said: “If there is a possible offer to be considered, it is only right that shareholders are given the opportunity to consider it. I believe the board of PSSL is therefore right to try and progress the offer process.”
“I also believe that a responsible manager should cooperate with the board in such a process, and give shareholders the chance to have their say.”