The board of Pollen Street Secured Lending has taken steps to remove its investment manager, PSC Credit Holdings, following "serious, repeated and ongoing breaches of the Manager's obligations under the [investment management agreement]".
The Pollen Street Capital was served with its 12 months termination notice by the board on Tuesday (25 February) following issues relating to a conflict of interest over a possible acquisition offer from Waterfall Asset Management, as well as concerns about its approach to the obligations of the company.
The offer made by Waterfall Asset Management on 8 January is to purchase the whole company at 900p per share, representing an 8.7% premium to its close of 828p on 24 February.
Following the offer, it is alleged that the Pollen Street board has been unable to obtain the company's relevant documentation and information from the investment manager to pass on to Waterfall.
PSC said it was "deeply disappointed" by the notice of termination and the decision made by the board "does not reflect the substantial improvement in the performance of the company" since it took over.
It added: "We strongly believe that it should be left to shareholders to determine the appropriate time for the release of sensitive commercial information to the offeror and, more generally, to determine the future of the Company.
"We have little confidence in the board being able to manage the release of highly commercially sensitive information and welcome the fact that we will now have an opportunity to engage with shareholders to discuss the appropriate course of action from here."
Waterfall, which has the support of Pollen Street's largest shareholder, Invesco, has until 24 March to make a formal offer, or withdraw.
In a broker note, J.P. Morgan Cazenove said: "Even if no other offers are forthcoming, and that this possible offer falls away, we see no way back for the manager, Pollen Street, with which the board has very publicly fallen out.
"Thus, in the event of no firm offer(s), a change of manager, or more likely a wind down of the portfolio is inevitable, in our view."