Ann: Revised Proposal from Albemarle, page-489

Originally posted by TrayonRanger

@Tünnes

HC tagger not working!


"I would be very grateful for an unequivocal education from you!"


First of all, there is no way I feel qualified to tutor you.

There are eminently more qualified than I here on the HC forum.

However, it is really not too complicated.

Two types of takeovers;...

1) Friendly

2) Hostile

Most manoeuvres start out under the guise of "friendly", in hopes of an amical (read cheaper), bloodless outcome.

If that should fail, then if very keen, the aggressor starts buying up shares until they have ninety (90) percent.

Once achieved, the last holdout of ten (10) percent are toast - held to ransom with no choice.

They get the same money as the others, but it's a forced sale whether willing or not.

For a friendly sale to be successful, it helps immensely if management are in agreement, but it is not mandatory, as the majority decides.

Formal friendly offers will result in a notice that, set conditions are thus and so, with the BoD in favour or not, followed by a "YES/NO" ballot mailout. (This may not be available to foreign holders outside Australia)

My experience is that a paper ballot is mailed out stating all the legal stuff and shareholders mark their preference and post the ballot back to HQ within a specified time period.

A vote count decides if the majority carries the day or if the offer is rejected.

One share equals one vote.

If the YES camp gets up, then the legals get to work with the contract formalities.

Once signed sealed and delivered (can take a few months), a cheque is posted to each shareholder and you just wave goodbye just like when you sell anything else.

If the NO vote wins the day, then the potential buyer can go back to their bean counters and calculate what it would take to be successful and consider a possible counteroffer (higher bid or better conditions) or they either launch a hostile takeover or give up altogether.

I sure hope this feeble effort helps more than confuses.

Thanks @TrayonRanger, I really appreciate your answer and I think I'm a little smarter now.
My assumption so far has been as follows:
If, for example, BHP offered me XXX BHP shares in a friendly takeover for my LTR shares, I would not have a sales process but only a conversion and would therefore not have to pay any profit tax.
That would be interesting for me because BHP pays a dividend of around 6% and I want to avoid double taxation.
I thought that was possible until now, it's a pity that that's obviously not the case!
Thanks again!