Yowie Group (ASX: YOW) launches takeover bid for Keybridge Capital (ASX: KBC) over A$6.6m debt default

Yowie Group Limited (ASX: YOW) has launched a conditional off-market takeover offer for Keybridge Capital Limited (ASX: KBC), offering shareholders one Yowie share for each Keybridge share in an all-scrip bid designed to resolve an A$6.6 million loan dispute between the two suspended entities. The Bidder’s Statement was lodged with the Australian Securities and Investments Commission and ASX on 13 June 2025, with the formal offer period set to open on 27 June 2025 and close on 28 July 2025 unless extended.

The offer, which includes multiple conditions including board control changes, minimum shareholder acceptance, and no adverse legal rulings, is being positioned by Yowie as both a financial recovery plan and a pathway to reinstate its own trading status on the Australian Securities Exchange. Yowie’s directors claim the acquisition would consolidate stakeholder interests, unlock creditor value, and enable a return to compliance with ASX listing obligations.

Why Yowie Group Limited is bidding for Keybridge Capital

Yowie Group Limited, an environmental-themed chocolate brand and IP licensing business currently suspended from trading on the ASX, is seeking to bring Keybridge Capital Limited under its control primarily to recover a significant unpaid loan of A$6.6 million. The amount is comprised of a reciprocal loan facility extended to Keybridge, alongside indemnified legal costs. Yowie argues that gaining control of Keybridge is the most effective way to resolve the default, restructure liabilities, and stabilise its own financial outlook.

The reciprocal funding arrangement was initially part of a working capital strategy shared between the entities, with Keybridge being Yowie’s largest shareholder and Yowie Keybridge’s largest creditor. However, when Keybridge failed to meet its interest obligations in January 2025, citing litigation constraints involving major shareholder WAM Active Limited, the relationship deteriorated. Yowie formally demanded repayment in February 2025 and subsequently issued a statutory demand for A$4.6 million. This demand remains contested in court.

Yowie’s directors believe the takeover is necessary to protect their shareholder base and to remove ongoing uncertainty caused by Keybridge’s default. Their position is that holding shares in Yowie, even while currently suspended, offers more long-term potential than holding equity in a company they consider to be distressed and facing serious solvency risks.

What is the current financial position of Keybridge Capital Limited?

Keybridge Capital Limited, which operates as an investment and financial services group with exposure to life insurance (New Zealand), property, private equity (United States), and cryptocurrency arbitrage, has experienced a sharp deterioration in its asset base over the past year. While its book value was reported at 5.30 Australian cents per share as of 30 June 2024, a subsequent Report on Company Activities and Property filed during its administration in March 2025 showed a significant decline to below 3 cents per share.

Following this financial distress, Keybridge entered voluntary administration in February 2025. Although it exited administration on 8 May 2025 following funding assurances from WAM Active Limited, it has yet to repay any portion of the A$6.6 million owed to Yowie Group Limited. The funding arrangement from WAM Active is a zero-interest, unsecured facility, and Yowie has stated that it views the ongoing default as unresolved and damaging to both firms’ financial standing.

Yowie argues that without control over Keybridge’s asset base and decision-making, there is little hope of securing repayment or resolving the reputational and accounting impact the default has caused.

What is the status of Yowie Group Limited’s own financial performance?

Yowie Group Limited, although currently suspended from trading on the ASX, reported a modest operating profit for the March 2025 quarter—its first in over five years. This turnaround was attributed to a new executive team, brand revitalisation initiatives, and the relaunch of Australia’s Ernest Hillier chocolate range, which had previously gone dormant.

Yowie has also reduced annualised costs by approximately US$2.5 million and streamlined its supply chain. At 31 March 2025, the group’s unaudited net asset value stood at 4.15 cents per share. Its shares last traded at 1.4 cents on 27 February 2025 before suspension under ASX Listing Rule 17.5, triggered by delays in filing financial statements due to uncertainty over the recoverability of the Keybridge loan.

The directors of Yowie believe that resolving the dispute through acquisition would enable them to lodge overdue accounts, meet ASX requirements, and seek re-quotation of its shares—potentially restoring liquidity for existing and incoming shareholders.

What are the key conditions of the takeover offer?

Yowie Group Limited’s offer is subject to multiple interdependent conditions, all of which must be satisfied for the transaction to proceed. The most critical include a minimum acceptance threshold of 35% of Keybridge shares, cessation of Keybridge’s control over Yowie, and no adverse legal or regulatory developments during the offer period.

A crucial complicating factor is the shareholder meeting scheduled for 14 July 2025, convened by Keybridge to alter Yowie’s board and constitution. Yowie has applied to the Takeovers Panel to delay this meeting until after the close of the offer period. Simultaneously, Keybridge has initiated legal proceedings in the Supreme Court of New South Wales seeking to validate the meeting and its right to vote its 58% stake in Yowie.

Other conditions include prohibitions on material asset acquisitions or board changes by Keybridge, no fall in Yowie’s net tangible asset value of more than 20%, and no sustained 10% drop in the S&P/ASX All Ordinaries Accumulation Index.

Yowie has clarified that it does not intend to waive these conditions. Failure to meet any of them would likely void the offer.

How are institutional and retail shareholders reacting?

Institutional sentiment remains fragmented. Keybridge Capital Limited’s largest shareholder, WAM Active Limited, is widely viewed as unlikely to accept the offer, based on its public statements and actions during the administration process. WAM Active also holds influence over Keybridge’s board composition and financial direction, making its position central to the outcome of the takeover.

As of 13 June 2025, Keybridge Capital Limited holds 153.1 million shares in Yowie Group Limited, representing approximately 58% of the total issued capital. Other notable shareholders include Franca Capelli (11.68%) and Aurora Funds Management, acting as responsible entity for HHY Fund (9.98%). Retail participation will likely determine whether Yowie can achieve the 35% minimum acceptance required to activate the offer.

Yowie’s directors are encouraging participation by citing operational turnaround, recovery of outstanding receivables, and the possibility of ASX re-quotation. However, investors are weighing this optimism against the legal risks, dual trading suspensions, and the possibility of prolonged uncertainty if control remains fragmented.

What happens if the takeover is successful?

If the bid proceeds as intended, Yowie Group Limited would assume control of Keybridge Capital Limited and restructure its liabilities internally. This would likely involve cancelling or renegotiating the A$6.6 million debt and realigning both entities under a unified financial and strategic direction.

Yowie has indicated that it would immediately pursue reinstatement to the ASX, supported by the removal of financial uncertainty linked to the Keybridge exposure. The firm also believes that consolidating assets and eliminating related-party legal distractions will unlock long-term value for all shareholders.

Keybridge shareholders accepting the offer would gain exposure to a revitalised brand licensing business with a cleaner balance sheet and international distribution ambitions, particularly in North America and Australia–New Zealand.

If the offer fails, however, both firms risk further value erosion. Yowie may need to consider writing down the receivable entirely, delaying its own re-listing, while Keybridge could face renewed creditor pressure, governance instability, and litigation costs with little path to solvency or operational normalcy.