The Woes of Wolf Street

Takeovers are never nice, there is the classic near one when Robert Holmes a Court nearly knocked off BHP with his structure of smaller companies one of which was the Bell Group and I think he ended up with 5% and a a seat on the Board. They say he would might have got his 20% if he brought in one of his wealthy mates who was in the background, but he always liked to work solo as that's the sort man he was. He wanted to cut BHP up into sections then if he got complete control. He made a fortune buying corporate dogs and considered himself an “entrepreneur” rather than a corporate raider. He abhorred such terms as friendly and unfriendly takeovers: ''That's introducing emotion into business. It's not a question of friendship but economic viability he said..''and ''An acquisition must produce profits within 12 months, and the quest for it should have as close to zero risk as possible.'' He made many active acquisitions of note. Alan bond (and SGIO) ended up with the Bell Group of companies in an agreed takeover for ($300mil +) which soon after collapsed and went into liquidation with a 20 year court case With 1.5Billion worth of debt Appeal judges in the West Australian Supreme Court upheld a ruling that the lending banks had to pay creditors of Alan Bond's Bell Group, who had filed the action against Australian and foreign banks, claiming they had lent money to Bell when they knew it was insolvent. You could fill volumes about takeover tactics by the big guys over the years and it is not a pretty thing because it is all out often breaking rules along the way. Many business who dealt with Robert Holmes a Court thought him often soul-less but most agreed he was a masterful business tactician. There are many films portraying corporate raiders with Greed Is Good philosophies or Gere type heroes who do things like making a My Fair Lady out of a pretty hooker. Anyway you could go on and on but the question is can you make a legitimise buck out of a corporate raider's prize possession. Or it could be put another way, is the share you bought from a takeover a very low cap company with prized assets one that can make holders a lot of money or have you got a shell for passing assets through.
Well, with the tribunal hearing for Takeovers (not a court case) over with a “We're looking at you!” frown and a clean up of holdings percentages arranged in the spider web. Are we reassured that we will personally benefit from the rich,when proven, assets by sale or otherwise or will they slide through into another company with not much share holder gain. Maybe, maybe not. Or we hope not, as many shareholders have made a fortune out of a small cap takeover from time to time.. But of the course the fear is, there are no assurances given. DYOR of course.