I agree that a scheme of arrangement can be a way to effect a 100% acquisition of a corporation, but I think you may be blending a couple of different concepts here when it comes to a non-friendly acquisition i.e. a so-called hostile takeover.
IMO the difference with a court-sanctioned scheme of arrangement (SOA) is that the information to be provided to shareholders has to come from the company itself i.e. the target (not the bidding acquirer, as is the case with a takeover). For that to happen, there first would have to be an agreement/ understanding reached between the company and the bidding acquirer e.g. to restructure the capital to avoid a looming bankruptcy, say, or to do a deal with creditors unhappy with the debt servicing (of which we don't seem to have any).
So, in a practical sense, for this to happen in a hostile situation (i.e. an unsolicited & unwanted offer) the company (i.e. the Board, in the first instance) would have to be 'persuaded' to become willing to vote in favour of that proposal. IMO that's not going to happen with CEO Itescu in his present role. And I suspect it is not going to happen with Dr George' Board rep in place either. What could a stranger promise them as Board members that they can't do & aren't doing for themselves right now? Ditto for the remainder of the Board, some of whom just spent a fair bit of hard-earned on FPO shares in the expectation of good things about to happen under the Board's existing control arrangements.
OK, so, where does the 20% come in?
It's the threshold - in terms of the votiing power of any individual legal person (directly or indirectly) - and the starting point of the application of rigid, involuntary takeovers code provisions which limit the number of shares a person can acquire in an ASX-listed corporation, & some others. In a secret, hostile situation it's the roadblock everyone comes up against at some point.
To get around it, & acquire more shares, an acquirer needs to fit in one of the limited exceptions - and an SOA can be an exception BUT as outlined above, an SOA needs to be friendly IMO (otherwise, why would the Board agree to it?). There are other exceptions to the limit, like the 'creep' allowance, but these are a bit of a distraction, at the moment, as I see things.
Without getting into the weeds on this (& everyone should do their own research, of course) it's enough to know IMO that if Dr George or CEO Itescu wanted to institute a hostile takeover in this manner, they could NOT have an understanding or agreement with anyone else on the Board of Directors to use their voting power to influence or affect the compostiion of the Board, the internal management or MSB's manner of doing business. They'd have to do it solo - i.e. without what's considered to be a 'relevant interest' in the shares of the other of them, IMO. If there were to be an examination of their behaviour & they were found to be working together in this manner - even through associates - they'd be blocked by the 20% rule from acquiring more shares.
And this is relevant to your point how? Well, IMO an acquirer - say Dr George - who reached the 20% threshold would NOT be able to promote and launch a scheme of arrangement (SOA) unless and until he also obtained the agreement of a majority of the Board entitled, willing & able to vote on what's in the best interests of the company as a whole. Keep in mind that this hypothetical Dr George would NOT have enough shares at that point in time to himself pass an ordinary resolution of the company to appoint his own directors.
To continue pursuing a SOA he may, at that point, have to offer to buy the vote of a majority of directors. If so, he'd immediately risk turning those directors into his 'associates' & jeopardising his chances of getting lawful control or ownership of up to 100% of the shares. Why would he do that? Why would he take that risk? Because that's when you can be very sure that ordinary MSB shareholders like all of us would hear all about it.
So, no I don't think any future takeover would have to be an SOA.
And in my opinion, more importantly, there is increasingly less likely to be any hostile takeover offer principally as a result of the current Board's efforts with the support of key major shareholders, including especially Dr George.
That's good. Keeps Bigpharma focussed on indication partnerships, IMO. Keeps them sharpening their pencils.
Not advice. DYOR. All good IMO.
Cheers GLTA(LT)H
MSB Price at posting:
$1.18 Sentiment: Buy Disclosure: Held
(20min delay)