COMMENCED

July 2020

OPENING PURCHASE PRICE PER SHARE

~$0.89 (average ~$1.16)

A2B had held fast against previous attempts by shareholders to unlock the value of the property assets.  We also saw an opportunity to improve shareholder value by abandoning its “fintech” ambitions, which we considered unrealistic.

Sandon Capital wrote to the Chairman ahead of the 2021 AGM to explain why it was voting against the Board’s recommendations.  You can read the letter here.

The outcome of the 2021 AGM sent a strong message to the Board that some shareholders, including Sandon Capital, were very dissatisfied with performance and the direction in which the company is heading.

Whilst Sandon Capital continued to execute its activist strategy regarding A2B’s operational performance, a more pressing issue was the announcement from A2B immediately prior to the 2021 AGM of a non-binding memorandum of understanding to swap its “jewel-in-the-crown” property in inner city Sydney.  In the announcement A2B told shareholders that the property was valued at $57 million. The Company thought, incorrectly, that this proposed transaction would placate shareholders.

The same property had been recently valued by the NSW Valuer-General at $71 million (for the land alone).  Sandon Capital also commissioned research by well known independent property valuers which concluded an indicative assessment of the property’s value at $77 million.

Sandon Capital believed the property could even achieve a significantly higher value than this if A2B were to obtain development approval.

Sandon Capital wrote to the Directors raising its concerns and called on them to immediately abandon the property swap transaction.  You can read the letter here.

A2B’s property valuations had been a point of ongoing dissatisfaction amongst shareholders.  Investor pressure in 2021 led to a revaluation of the A2B property asset portfolio from $10 million to $81 million. Sandon Capital believed the portfolio could be worth far more and it was this fact that underpinned the decision to invest.

Sandon Capital rapidly concluded that the then Board of A2B was unwilling to change.  It set in motion a series of actions that culminated in the departure of the incumbent Chairman and the long-serving Managing Director.

The new Board appointed Mr Mark Bayliss as executive chairman.  He then conducted a strategic review.  The outcome of the strategic review, entitled “Better before bigger” was a much-needed change of direction, with new, more realistic objectives.  A2B would become a more focused personal transport company and would sell its portfolio of properties.

A2B has turned around its core taxi business and has now sold all its properties for gross proceeds of $105 million.  On 22 December 2023, A2B announced it had entered into a scheme of arrangement with Singapore’s ComfortDelGro. Shareholders approved the arrangement and received a total of $2.05, comprising a $1.45 in scheme consideration and a fully franked special dividend of $0.60 per share in April 2024.

When Sandon Capital first invested in A2B, its market capitalisation was approximately $110 million and the company was committed to a strategy that was eroding the value of the business.  Sandon Capital’s campaign to change the Board has led to a significant change in fortunes for A2B and its shareholders.

Prior to the payment of the special dividend and delisting a market capitalisation of more than $260 million had been achieved. In three and a half years, more than $150 million of shareholder value had been created.