Keybridge Capital (ASX: KBC) says there is “no realistic prospect of its takeover target Yowie (ASX:YOW) becoming profitable anytime soon.

The fund manager issued their bidder’s statement for the has officially launched its $20m takeover bid for Yowie after first flagging their intention to take the company out six weeks ago.

Keybridge is offering 9.2c a share.

In a delightfully testy section of the bidder’s statement justifying their move, Keybridge told Yowie shareholders they felt as if they had no other choice after failed attempts to lobby the board to make changes for a corporate turnaround.

“Keybridge has decided to make this offer to protect the value of its investment in Yowie and to allow it to address the issues causing these losses within Yowie,” said Keybridge chairman John Patton.

He said Yowie had lost $27m since mid-2015. He accused the board of, “act[ing] in an aggressive and reactionary manner” towards Keybridge.

Keybridge is already a major shareholder in Yowie, having a built a 20 per cent stake with two other fund managers in early 2018.

What will Keybridge do?

Keybridge saysit wants to “restore market confidence” in the company. It has promised to overhaul the board, removing at least two of Yowie’s current directors, Louis Carrol and Glen Watts.

If it acquires more than 50 per cent of shares in the off-market bid, managing director Mark Scheussler will go as well although Keybridge was open to him staying on as global CEO.

Once the board overhaul is complete, Keybridge promised it would review Yowie’s operations to reduce expenses and increase revenue.

If Keybridge is able to acquire more than 90 per cent of Yowie, it will try to take the company private. In such an event, Yowie will continue to exist as a separate company; the only difference being as a subsidiary of Keybridge.

Keybridge “will continue as an investment services group with a diversified portfolio of listed and unlisted investment/loan assets [sic], which would now include the Yowie Group assets and operations”.

What next?

Yowie’s current board opposed the offer when it was first announced and so far there is no indication it will change its mind.

One plot twist might be what fellow substantial shareholder Wilson Asset Management might do. On March 22 it bought a 13 per cent stake, nearly double that of Keybridge.

While Wilson has said nothing since, Keybridge was suspicious enough to apply to the Takeovers Panel to vest the shares in ASIC for sale. The bidder’s statement noted the Takeovers Panel had not made a ruling but promised to issue a supplementary statement when a ruling is made.