IMO the takeover panel should rule in the best interests of shareholders and free SG of their best and final condition and allow them to increase the bid. It ensures this process will get finalized and holders are paid a reasonable price for their shares.
I think thats a key question that needs to be further explored, will the Takeovers Panel be prepared to make a ruling about which of the two offers are superior of will the panle decide to rule that they are "equal".
If they are "equal" then theoretically the Takeovers Panel can impede or stop Shandong from increasing their offer, otherwise Shandong might fall foul of the truth in takeovers stuff?
So the panel will have to weigh up its natural instincts to allow the best or "most open and transparent" outcome for CDV shareholders i.e. allowing Shandong to bid higher vs setting a precedent where the "Best and Final" conditions of a takeover offer become a complete and utter joke and unenforcaable... You would have to think that the Panel would want the words "Best and Final" to be meaningful and something that shareholders could rely on though.
Maybe the Takeovers Panel will try to decode the language and decide what the exact intention was of the "Best and Final" offer from Shandong statement? Will the Panel say something like it was the intention that Shandong could bid to match equal and superior offers or only superior offers? And allow Shandong to increase its offer?
The key part of this now is the "tag-along" provision that Shandong is offering, if you think about it - in the hypothetical situation that both Shandong and Nord both had "tag-along" provisions then would this effectively mean that both bidders would end up in an infinite feedback loop where they both have an infinite amount of time to match or out-bid any other offers or would this effectively mean that they would both match their opponent last.
I would still love for the Takeovers panel to dig back into all the trades above the various bid levels and work out if there has been any related party bidding and pledging above the various offer amounts in the past and restore all those shares to their original owners. The effect of that would be to put more ownership of CDV out of Nord and Shandongs hands with the obvious downside that one or both of them could be found to be in breach of corporation law. You would have to think that any party found in breach of the corporation law would get some pretty rough treatment by the Takeovers Panel.
The best and final offer declaration means, legally, neither buyer can up their price again. However, it seems Cardinal is trying to find a way to tip the buyout in Shandong's favour by allowing the company to be released of its declaration.
Shandong was the first to declare its best and final offer "in the absence of a higher competing offer" — meaning if Nordgold or any other entity offers more than $1, Shandong is once more free to lift its own offer price.
After Shandong declared this, Nordgold raised its offer from 90 cents to $1 to match the Shandong bid.
However, after Nordgold's increase, Cardinal told shareholders that Nordgold's offer — while no higher than Shandong's — was a higher competing offer to its previous competing offer of 90 cents.
Cardinal said its financial advisers believe this means Nordgold technically made a higher competing offer after Shandong made its best and final declaration, and as such, Shandong could legally depart from the statement and up its offer price.
Nordgold is having none of it.
CDV Price at posting:
$1.02 Sentiment: Hold Disclosure: Held
