Ann: Becoming a substantial holder, page-21

If your intention is to go for a scheme, building a pre-bid stake actually hurts your ability to pass the scheme, because you are obviously precluded from voting on your own scheme proposal.

Pretend there are 100 shares on issue. To pass a scheme vote you need 75% to vote yes, so 26 no votes kill your scheme.

But if you build a pre-bid stake, you buy 20 of the shares. You still need 75% of votes in favour, but you can't vote so 20 of the shares aren't voted on.

So for 75% you need 60/80 votes in favour of the scheme, so 21 votes now kill your scheme.

Doesn't seem like much, but this is important when you are anticipating a counter bidder, because that counter bidder can get themselves 20 of those 21 votes.

Further, TLEA don't lose anything if they don't get a pre-bid stake before the scheme. Scheme fails and they can move on if they like, or build themselves a pre-bid stake now and go for a takeover.