Originally posted by Goldwater
Why does the price of the buy in keep getting brought up? Let me know if I'm wrong on the below.
https://www.ashurst.com/en/news-and-insights/legal-updates/takeovers-in-australia/
SKI can't buy more than 20% of the company under the corporations act without approval from the Government (good luck lol). SKI can't buy on market without jacking up the price.
SKI are literally forced to do it this way if they want to take up the option. They are not going to try and get "more shares" for a cheaper SP.
I presume the 12c SP was chosen for some tax/corporate reason and it is not to be treated in the same way that we buy shares.
SKI are essentially trading 80m for 19.99% of the company, the maximum they are allowed to buy without approval from the government.
Note this section:
If the potential acquirer is a foreign person, or is controlled (20%+) by a foreign person (including a foreign government), it may need to obtain prior clearance from the Federal Treasurer, through the Foreign Investment Review Board (FIRB). The Treasurer has power to block acquisitions that are contrary to Australia’s national interest, and make disposal orders if the acquisition has happened. In making his decision the Treasurer and FIRB will consult with a range of other government agencies (including competition, taxation, defence and security agencies).
I don't think it is a discussion about whether they can get more shares for a cheaper SP, it is whether they can get the same shares for a lower SP.
They can go over 19.99% with shareholder approval, but an independent expert report would be required for the notice of meeting.
FIRB will not be a problem. They are a Korean investor and it isn't a sensitive asset (like a port i.e therefore related to security). Thresholds for Korean investors are already higher than for other foreign investors (similar to the US, Japan and some other countries we have close ties to). I don't know if FIRB is needed for this deal (there are some special approvals required around companies that have mining tenements etc, which could be triggered), but if FIRB was required it would not be an issue - it will simply require time to be processed or re-processed if there is a price change. If the government rejected a deal like this is would be crucified. Most FIRB approvals sale through no problem, only a handful are knocked back and they are very public and usually political decisions.
Once suspects they can't buy on market because they may have inside information. But if the market were cleansed they could buy on market (and if FIRB was needed they could get this confidentially without the Company knowing).
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