Ann: Response to ASX Price Query, page-147

Normally, the first you hear of a takeover by deed of implementation is after the deal is done, the contract is signed, and the directors unanimously recommend the deal. The only reason you're hearing about it now is there is suspicion that the news might have leaked. This happened a month ago with CSR, except that after they went into a trading to respond to a speeding ticket they finalised the deal and announced it.

Deeds of implementation are filthy things:

1. The entire deal is done in secret without any kind of disclosure, if both sides of the deal can keep it quiet.
2. The contract expressly forbids the board from engaging with any other offers: no due diligence, no discussion.
3. The contract expressly forbids the board from approaching other potential buyers.
4. The shareholder register will almost instantly be swamped by arbitrage traders who are only interested in seeing the deal completed so they can collect their gains. These are the guys that will overwhelmingly vote in favour of the deal... not you. So if the board isn't doing the right thing by the shareholders, there's pretty much nothing you can do about it.

ASIC should ban the use of deeds for anything other than companies in receivership. They're anti-competitive. Only on market takeovers should be allowed for publicly traded companies.