Ann: Notice of Meeting including Independent Experts Report, page-22

[Monday 17/06 Update]

I spent some over the weekend doing the Deep Dive to properly inform myself of all the issues. It resulted in drafting/sending a detailed letter to the Chairman, explaining several concerns I have, along with questions, regarding Res 1. Who knows, we might see some amendments &/or additional information come down the pipe in the not-too-distant future... or not.

I also obtained a copy of the proposed replacement Constitution this morning, to fully apprise myself of the issues relating to Res 2 (the proposed replacement Constitution). I was most interested in the new Partial (proportional) takeover provisions (new clause 36).

For those who are interested, in general terms, the Corporations Act only permits full (100%) takeover bids. In situations in which a T/O suitor only ends up with less than 100% and decides to settle for that lesser amount - but still with an overwhelming majority and obvious control (eg: ends up with, say, 80% ownership), then the default Corps Act provisions can allow that to occur (subject to certain criteria). The key is that, historically, the T/O suitor couldn't aim for less than 100%, but if that's how it panned out because not everyone accepted the bid, then that's how it panned out. The problem is/was that this could give rise to "stranded" investors who, using the same example, collectively own the remaining 20% - still publicly listed, find it difficult to sell because the available free float is held so tightly that there is effectively no active/liquid market for their shares. The holdouts can be are effectively trapped in such situations.

To combat this, the Corporations Act was amended some years ago to allow companies write into their constitutions a mechanism for partial takeovers. It provides a framework, with associated rules, whereby a takeover suitor can offer to bid on a partial takeover of a company, without needing to make a full takeover bid. This can only happen where the target company has already amended its constitution to allow this to occur. If a company has not altered its constitution, then the default 100% takeover requirements of the Corps Act applies. Furthermore, where a company has amended its constitution to allow for partial takeover bids, this must be renewed by a vote of shareholders every 3 years, otherwise it will lapse. It's not a set-and-forget thing.

Ordinarily I wouldn't have a problem with this...

BUT

Since context is EVERYTHING, and we have two potentially predatory major shareholders on our share register, there is ABSOLUTELY NO WAY(!) that I will voluntarily support this under our present ownership circumstances - for reasons that are hopefully too obvious to bother spelling out (but I will if asked to).

So, I am changing my earlier view and will now vote "No" for Res 2 - primarily because of the new Partial (proportional) takeover provisions (new clause 36) contained therein. If the Board changes the scope of Res 2, then I'll revisit my decision.

So there you have it, for me it will be a "No" Vote across the board for all 3 Resolutions as they currently stand!

Z

PS. Res 1 & 3 both require an Ordinary Resolution (>50% acceptance) to be adopted, while Res 2 has a higher Special Resolution (>75% acceptance) threshold.