owner of JB Super is Dr Jane Hutson, page-9

Circumstances relevant to JB Super

1. On 6 July 2015, JB Super acquired 97,500 Affinity shares at $0.71 per share.
2. Ms Hutson and Dr Hutson are sisters. They are reasonably close because Ms Hutson is a director and shareholder of FUB Investments Pty Ltd, which jointly owns a beach house with Dr Hutson in NSW.
3. They also have, or had, other common investments, such as Crossborder Investments Pty Ltd in which Dr Hutson was a shareholder and director and Ms Hutson is currently a shareholder and director. Mr Peffer was also a former director of Crossborder from 2 June 1993 until 9 November 1993, prior to Ms Hutson's appointment as a director.
4. They also have some common dealings, such as John Bridgeman Limited in which Dr Hutson invested and Ms Hutson (through Wellington Capital) advised. Ms Greaves was also a director of John Bridgeman and is currently its company secretary. Taxonomy is an option holder in John Bridgeman.
5. Affinity submitted that there were other connections between McCullough Robertson and JB Super but we do not consider that much turns on this.
6. At approximately 4pm on 21 August 2015 (the day offers under the scrip bid opened) Dr Hutson instructed Ord Minnett Limited to accept. At 3:02pm on 24 August, JB Super's acceptance was processed on CHESS.
7. JB Super submitted that it did not hold any discussions with G8 in relation to JB Super "acquiring an interest in Affinity nor the acceptance [of] the Scrip bid or the on-market bid".
8. G8 submitted that there "have been no interactions with JB Super or Jane Ann Hutson by any director, adviser, agent or substantial holder of G8, or any person on behalf of G8, in relation to G8's acquisition of shares in Affinity, the scrip bid or the on-market bid".
9. Affinity questioned the accuracy of such submissions given JB Super's acquisition of Affinity shares the business day after G8 announced its scrip bid and its instructions to Ord Minnett to accept the scrip bid on the day that offers opened. We do not accept that nothing was said between the sisters. The timing of Dr Hutson's acquisition of Affinity shares, acceptance of the scrip bid and how G8 represented that acceptance in a substantial holding notice each raise questions in our view.
10. On Monday, 24 August 2015 at 8:45am, G8 lodged a substantial holder notice disclosing that it had received acceptances under the scrip bid for 10,597,500 shares. This number includes 10,500,000 shares from Taxonomy and an additional 97,500 shares.
11. In response to an ASIC notice seeking documents in relation to G8's 24 August substantial holder notice, G8 provided to ASIC documentation in relation to Taxonomy's acceptances for 10,500,000 Affinity shares and a copy of a "Transfer and Acceptance Form" from HSBC Custody Nominees (Australia) Ltd.
12. The HSBC form is signed by two individuals "under the Power of Attorney dated 31 March 2009 by its Attorneys". The number of shares, pre-populated in the form, is "2733707". This number has been crossed out and "97,500" inserted and initialled. The signatures and initials are not decipherable. G8 submitted it returned the form to HSBC as incomplete. It is unclear why G8 and not G8's share registry, Advanced, did this. It is also unclear why a copy of the form was provided to ASIC if it was incomplete. HSBC has informed us that it is not aware of the form. Moreover, it advised us that acceptance forms for the scrip bid were not provided by HSBC to the beneficial holders for whom it acts. HSBC submits all acceptances electronically via CHESS on receipt of authenticated instructions from its clients.
13. G8 submitted that its 24 August substantial holder notice included the shares in the HSBC acceptance form. On 28 August 2015, G8 lodged a substantial holder notice disclosing that it had received an acceptance under its scrip bid for 97,500 shares on 24 August 2015. JB Super submitted that the shares included in the notice of 28 August represented its acceptance of the scrip bid rather than those in the notice of 24 August.
14. Affinity submitted that the HSBC acceptance form was "curiously and inexplicably, the exact number of shares held by JB Super". Whose shares the form represents remains unexplained. We note that G8 included Taxonomy's CHESS holding of 2,000,000 shares in its 24 August notice when those shares could not have been accepted before 9:30am on 24 August 2015. Therefore G8 knew of that acceptance. We think that the likelihood is that the HSBC acceptance form was created to represent JB Super's acceptance.
15. We infer that JB Super's instructions to accept the scrip bid were communicated to G8 and this was prematurely reflected in G8's substantial holding notice dated 24 August 2015. We infer that the communication involved an understanding about acceptances into G8's scrip bid.

Actions which are uncommercial

1. Affinity submitted that JB Super's acceptance of the scrip bid on 24 August 2015 was uncommercial, essentially for the reasons given earlier in respect of Taxonomy's early acceptance.¹³
2. JB Super submitted that it accepted the scrip bid "as it considered that in the long term the shares in G8 would increase in value."
3. JB Super also submitted that "JB Super had been independently advised by Ord Minnett Limited and run solely by Dr Hutson for 14 years" and its decision was "formulated over a 3 week period and was informed by the announcements".
4. We consider that JB Super's submissions do not adequately explain why it accepted so early in the offer period. Based on our experience, we think that, if JB Super had sought advice from Ord Minnett, it would likely have been advised to wait and not accept the scrip bid so soon. JB Super has not provided evidence of any advice Ord Minnett actually gave it in relation to the bid.
5. Affinity submitted that, if JB Super's purpose in acquiring Affinity shares was to acquire G8 shares, then on each day since 3 August it would have been able to acquire more G8 shares by selling its Affinity shares on market and using the proceeds to buy G8 shares on market, instead of accepting the scrip bid. JB Super submitted that Affinity's calculations did not take into account 1% brokerage costs for both trades. This is true but there would still have been a gain. We consider it unlikely that the company would be managed generally in an uncommercial way unless there was another motivation. Indeed, JB Super's superannuation investment objective is to "outperform the all ordinaries over the medium to long term".
6. JB Super has significant total assets of which its investment in Affinity represented about 5.5%. Its portfolio comprises blue-chip investments, apart from two companies each of which is connected with Ms Hutson. It invested in both of these companies in 2015.

Conclusion on JB Super

1. We infer that JB Super bought Affinity shares and accepted the scrip bid early, and in doing so forwent profits, to support G8's bid.
2. In our opinion, based on our experience, JB Super acquired its Affinity shares in connection with an agreement, arrangement or understanding it had with Ms Hutson in relation to the G8 bid. In other words, there was a shared goal or purpose. Given, as well, the family and structural links and common investments, and G8's involvement in processing of JB Super's acceptance, we infer that G8 and JB Super had a relevant agreement (alternatively, were acting in concert) in connection with JB Super's acquisition of Affinity shares and acceptance of the scrip bid. http://www.takeovers.gov.au/content...sons_for_decisions/2015/009.htm&pageID=&Year=