First Capital Group (First Capital) has changed its stance over the purchase of Explorer Group (Explorer), with the financial services firm announcing it will back down on parts of its deal.
In a letter to its shareholders, First Capital, which currently controls 30 per cent of the shares in Explorer, announced it will not continue with its acquisition of a 10 per cent stake in the group.
"First Capital has sent a notice to unwind. Notwithstanding the provision of this notice, the board, after consulting with the vendor, remains confident that it will be able to agree to acquire this 10 per cent interest in the near future," the letter said.
"On this basis, FIC's unwinding of the 10 per cent interest remains an incomplete negotiation for the purpose of ASX Listing Rule 3.1A.3," it said.
However, despite backing out of the 10 per cent purchase, First Capital still plans to proceed with the purchase of 60 per cent of the issued capital of Explorer.
Explorer Group's major shareholder and Direct Portfolio Services executive chairman John Aldersley is not at all happy with this decision.
"As regards First Capital, I think any ambition they might have they are going to gain control of Explorer Group is dashed," Aldersley said.
"If they end up as a minority holder I've got no interest in them taking a board or management position. And that's as far as it goes."
Aldersley said the only way First Capital would acquire his 60 per cent stake in Explorer is if they took him to court.
"They're now trying to get out of the 10 per cent shareholding, but they are still arguing that they are pressing on with the 30 per cent," he said.
"Obviously they'll have to take me to court to get there 60 per cent but I wouldn't give much of a probability on that.
"But they may well end up with 30 per cent, but they've now walked away, or tried to walk away from the 10 per cent. And they can technically walk away presumably therefore the 30 per cent still."
In July last year, Direct Portfolio Services executive chairman John Aldersley entered into an agreement with First Capital for the sale of his shares in Explorer Group, the holding company of Direct Portfolio Services.
First Capital Group (First Capital) is on the hunt for a new managing director after Leslie Freeman announced his resignation late yesterday.
First Capital executive director Tom Wallace has been named as acting managing director.
