Thanks for the kind words, fellas.
Bowmo, I can see how you might look at it that way, but here's an alternative way of looking at it:
Resolution 2:Hypothetically, using the same example as previous, a future suitor could make a partial bid for 80% of the Company if these proposed changes were adopted. And this would still have the same result of leaving the remaining 20% potentially "stranded". That's an unlikely and somewhat contrived scenario, but I wanted to apply it to the numbers used in the previous example to demonstrate that the same unpalatable outcome for remaining minority shareholders could occur.
We already have two major shareholders who, between them, currently account for ~37% control of the Company (BMM/EM - 19.8%, AF/Squadron - 17.1%). The default situation with the Corps Act is that if either one of them (or anyone else) wants to control the Company by virtue of increased shareholding (and the increased voting rights that go along with it), they will need to make a takeover bid for the entire Company. This usually means that a premium needs to be offered to existing shareholders to entice them to sell. The degree of that "takeover premium" will influence just how many shareholders are sufficiently enticed to sell. In short, the requirement to make a 100% takeover bid, regardless of whether it actually achieves anywhere near its stated goal, provides a competitive tension on the suitor to maximise the offer price. One (only one) of my concerns with the proposed change is the potential that a Proportional Takeover may not provide the same pressure for a suitor to offer a "control premium" in the price of any potential future bid - remembering that you only need a 50.1% shareholding to control the Company (i.e. it takes less effort to attain control of 50.1% than 100%).
In short, my position is to not make it easier to further consolidate the power held by a couple of shareholders that the Proportional Takeover Approval Provisions could potentially allow to happen.
There are many ways to skin a corporate cat and we minor shareholders cannot control all of them. In this instance, however, we do have an opportunity to make sure that a door which potentially makes it easier for BMM/EM &/or AF/Squadron (or anyone else) to obtain more control remains closed!
Right now, I think we have a reasonably healthy mix of shareholder types on the register. 37% is in the form of two cornerstone investors - one of which (BMM/EM) is private equity money (<<--"bing!") who have already shown they would like full control! The other (AF/Squadron) has not yet tipped its hand. The balance (63%) is made up of a mix of some Euro hedge funds, large and mid-range sophs and, finally, Mums and Dads bringing up the rear.
I am a long-term holder with a larger-than-average stake who wants to participate in the next Ni bull market using POS as the vehicle. I do not want to be locked out. Will that happen in the fullness of time? Don't know, as I cannot foretell the future. That's the game we're in. However, I'm not gonna make it easy for those who (might) want to cut my lunch.
PS. We already face the prospect of BMM/EM growing its shareholding by 7.7% to, say, 27.5% if they obtain the right to convert the Convertible Note and it elects to do so. That would mean the combined shareholding of our two major shareholders would then grow to 45.5%...
(Unrelated to my reply to Bowmo, here are some additional thoughts to...)
Resolution 3:
My spidey sense suggests that there may be some problems emerging at Board level (reading between the lines - pure spec on my part)*. My best guess is if there are problems, they would most likely be due to the two Directors who are nominees of each major shareholder.
There are currently four Directors on our Board, including the Chairman and the CEO. Since two Directors are nominees of the major shareholders, I see merit (from a good governance perspective) in increasing the total number of Directors to five. This would provide some comfort (in my mind, at least) that any one or two strong voices are not able to effectively hijack the Board. Checks and balances and good governance and all that terribly boring, but very important stuff...
Although the prospect of increasing the number of Directors to five wasn't dealt with specifically in the Notes to Res 3 there was passing reference to "...any new non-executive directors joining the Board" (3a, p.15).
On reflection, this might be one of the drivers for presenting Res 3 to us for approval. On this issue alone I would be in favour of increasing the available pool of Directors fees to accommodate an additional Director, but I am not keen on simply increasing the available pool for the sake of it. More information is required. If it's forthcoming and makes sense to me, then I'll go along with it.
(*Because why is Res 1 being presented to shareholders in its current form? And why have the Directors not provided a full explanation to support their recommendation, but have instead simply copied/pasted so-called Advantages from EY's IER, which is a statutory-prescriptively narrow expert's report that doesn't give full context?)
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