Just on this part of your post - can you clarify what you are saying that: ".... shareholders are entitled to have reasonable time to assess and decide on the competing bid. In addition, it is not possible for a SID to not have a termination clause as the Corporations Act supersedes any deal made."
Are you saying that the corporation's act specifically prohibits a scheme of arrangement that does not have a termination clause? It seems there is a termination clause in the FFR/GGY arrangement but only FFR has access to use the termination clause. Either incredibly stupid by the board of GGY (and their legal team), or maybe a design feature that had a specific purpose and acts as a poison pill as other posters have suggested? We can debate the motivation to have a one-sided termination clause all we want, but the legality and, I suspect, the views of the Takeovers Panel will possibly be the decider here.
The key road marker here is also the admission by the board of GGY that the WGX offer may be a superior proposal is something that GGY had to admit, and probably was a measure of last resort that keeps them out of trouble with the laws regarding fiduciary duties to their own shareholders. It would be reasonable to assume that every other possibility was explored by the GGY board and their legal team before they made this admission. Its a peculiar admission for them (GGY) to make, as it basically says that because the FFR & GGY scheme has no termination clause then the superior offer from WGX is unable to be considered so take no action. I don't think anyone would have issue with the take no action advice but with the first part, surely that's just an open invitation for a litigation funder to gather some GGY shareholders together and take the directors of GGY (and their professional liability insurers) to the cleaners?
Obviously FFR have no need to or interest in co-operating with WGX, given their commercial realities and sound legal position at the moment. The board of FFR have well and truly looked after their shareholders to date.
WGX can either get a major GGY shareholder to go to the Takeovers Panel to get a declaration of unacceptable circumstances, or they can themselves go directly to the Panel, but either way, the goal for them is get the scheme of implementation between GGY and FFR at least stalled or paused until they can come up with other legal options, and/or a commercial transaction that is acceptable to GGY shareholders, and possibly FFR shareholders. As for the WGX shareholders - It all looks like a bit of a last-minute scramble and/or poor decision making and a lost opportunity if they can't complete the takeover and get control of GGY, if they do successfully execute at current implied values it will look like they got a bargain, but most likely due to their own lawyers and/or the intervention of the Takeovers Panel. If they have to pay more or improve their offer then WGX shareholders will reserve their judgment until the entire thing is completed and the performance of the GGY assets starts to deliver/or not deliver.
If the panel declines to declare unacceptable circumstances then presumably the scheme of implementation just locks the FFR and GGY deal in, and that will be completed, but after completion, there is nothing preventing WGX from having another go later on? Or maybe since FFR hold all the cards, might just be easier for WGX to launch a takeover of FFR, gain control, and then force the scheme through? Obviously impractical as far as timelines are concerned but would be quite amusing.
The other possibility is, what is the likely result of the Takeovers Panel declaring unacceptable circumstances? The simplest and most elegant solution for the Takeovers Panel would be for the panel to eliminate the one-sided scheme of arrangement between GGY and FFR, so then the GGY board can review the current offer from WGX and make recommendations accordingly without the impediment of entertaining a bid that at the moment is technically unable to be legally completed. Quite a big step for the panel to take, but they are there to look after shareholders' interests in takeovers situations, so this situation seems to fit the bill.
Have I covered all the obvious options? Are there any blocking stake tactics that could come into play given that all parties are trading on the ASX on Monday? A quick solution might be someone talking to a major shareholder and acquiring a large position with a trade sale or off-market transaction?
I think the only way out for the board and directors of GGY to come out of this with their credibility intact is if the GGY+FFR scheme is completed, and the merged entity goes on to become a successful operation in its own right, and/or attracts a higher value takeover offer later on....
GCY Price at posting:
42.5¢ Sentiment: None Disclosure: Not Held
(20min delay)