Well my fellow ADN shareholders,
That made for some interesting reading indeed, and emphasises to me yet again why it is so important for all of us to read carefully through the “fine print” in these (at times rather dull and lengthy) corporate governance documents.
I would commend it to you all for perusal when you have a spare moment.
My commentary, limited to a specific issue, should it be of any interest to you at all (and I suggest it ought to be):
1. Resolution 7: adoption of proposed new company constitution.
No doubt this resolution will be skipped over entirely by most of us, or at best attract a brief skim read followed by a not insignificant yawn. For the reasons that follow I would suggest that it may be somewhat more important than that.
The proposed resolution is:
”That, the Proposed Constitution tabled at the Meeting (excluding clause 25 containing the proportional takeover provisions which requires separate approval under Resolution 8) and for the purpose of identification is signed by the Chair, is approved and be adopted asthe Constitution of the Company in place of the current Constitution with effect from the close of the Meeting.”The explanatory memorandum then goes on to state the following:
In essence, it would appear that: (a) ADN’s company constitution is somewhat long in the tooth, pre-dating the Corporations Act 2001 and the various subsequent amendments to that legislation and ASX listing rules; and (b) generally, the company views it as preferable simply to replace the entire constitution rather than do a “patch up job” on the existing one.
Annexure “2” to the explanatory memorandum provides a summary of the key differences between the pre-existing constitution and the proposed new constitution. I have not yet read the proposed document; apparently one can request a copy from our Company Secretary, Nick Harding, or alternatively it can be viewed at the company’s registered office in South Australia (the former option sounds a little more convenient!). Think I will do so.
What caught my attention in particular - and on which I will expand below - is proposed clause 25 which concerns “proportional take-over bids”.
2. Resolution 8: Approval of proportional takeover provisions.
The proposed resolution is as follows:
”That the proportional takeover provisions set out in the Explanatory Notes to this Notice of Meeting be inserted into the Proposed Constitution tabled for approval under Resolution 7, with effect from the close of the Meeting;or, in the event that Resolution 7 is not passed, the same provisions be inserted in place of clause 164 of the current Constitution with effect from the close of the Meeting.”
The relevant extracts from the explanatory memorandum are as follows:
Now this is where things have become a little more interesting.
Should it not immediately jump out at you, then I would refer you to this specific paragraph from the above:
”The provisions will ensure that all members have an opportunity to study a proportional bid proposal and voteon the bid at a general meeting. This is likely to ensure a potential bidder structures its offer in a way which is attractive to a majority of members, including appropriate pricing. Similarly, knowing the view of the majority of members may help individual members assess the likely outcome of the proportional takeover when determining whether to accept or reject the offer.”
Based on the extensive discussion that has taken place within this forum over some time now, I feel relatively confident in stating that: (a) by and large we are all in general agreement that ADN represents an attractive take-over proposition for at least 2 or 3 predatorial titans in the global industrial minerals space; and (b) the spectre of a “cheap take-over” of ADN is something that most shareholders overwhelmingly wish to avoid, in favour of ADN realising its clear and full potential as a veritable David in the company of Goliath(s).
In my respectful opinion and view, the upshot of proposed resolutions 7 and 8 for the upcoming AGM is that:
a. We now have tangible evidence of our board taking active and meaningful steps to attempt to safeguard shareholder interests against the possibility of unwanted take-over / change of control transactions in respect of the company.
Assuming the resolutions are passed, and limited to the proportional take-over provisions, I really must tip my hat Mr Harding - our esteemed company secretary - to whom I suspect at least some credit must be attributed for identifying what, on one view, might be described as a chink in ADN’s corporate armour and subsequently taking steps to seek to remedy the same. Outstanding stuff.
On separate occasions (relayed in this forum by other posters) I understand that James Marsh has indicated acute awareness of the prospect of take-over, and that the company was taking steps to combat this. While until now I was uncertain as to what this could possibly and meaningfully entail in the course of ADN’s day-to-day activities and the progression of its halloysite-kaolin endeavours, on a corporate level there can be little doubt this is such a counter-measure and may arguably close the door on a Trojan-horse like scenario transpiring.
b. Further to (a) above, shareholders can again be firmly reassured that we appear to remain in the best of hands with our current management team and senior staff.
As always, the commentary above represents my personal opinions and should not be relied on as advice in any form - and please ensure you use your own judgement when considering the resolutions to be passed at the upcoming meeting.
Very best to you all.
(20min delay)