I believe that there is a pending buyout proposal for AMA from a shadow buyer who's interests are being serviced by
CDAM (UK) https://www.cdam.co.uk/
I also believe that the interested party borrowed stock from BNY Mellon, Northern Trust Co, Societe Generale, Citigroup Global Markets, UBS AG, Citibank N A Hong Kong, Citicorp Nominees (Australia), Royal Bank of Canada- to fulfill a strategy of pushing prices lower and lower yet selling effectively to the entities they control. The trading was done via Colonial First State Investments & Commonwealth Bank who filed "form 603" on 31/3/2020 and commenced a "dump" operation to push prices down. I'd like to know the status of 26,975,001 shares controlled by Simon Moore (Rule 3.19A.2) during this time.
Interestingly, the goal was to drop prices while buyers were interested parties. The beauty of their strategy is to drop the price to shake up existing holders (aka "weak hands") and buy all stock which exists outside their control. The flaw in this strategy that if the "weak hands" become "strong" then they won't cover easily and pay ANY price.....
I'd like to see who and how used the holding of 26,975,001 shares controlled by Simon Moore (Rule 3.19A.2) during this time.
15c on 23 March to 46.5c high today..... $15,000 became $46,500 in case you want to see an example. That's an upside of x3 times in 13 trading sessions.
Next targets are: $0.86, then quickly $1.01, $1.44 or higher unless goes parabolic because of a short squeeze.
ARE YOU FAMILIAR with a notion of a "short squeeze"? Yep, this is when someone borrowed stock and sold short but now tries to cover yet cant find any stock..... Remember 2008 story with VW... https://www.reuters.com/article/us-volkswagen/short-sellers-make-vw-the-worlds-priciest-firm-idUSTRE49R3I920081028
What's happening now? Mitsubishi UFJ Financial Group started accumulating stock. 6.13% has already been bought (Form 604 filing on 7/04/2020) so very soon the "smart" [not] seller will need to cover their positions.
It may get more interesting......Competition and Consumer Act 2010 (Cth) (CCA) applies to the current TURMOIL of AMA shares.
“Acquire”[1] includes any legal or equitable interest[2], both directly or indirectly[3]. The term “likely” means some possibility, applied at a level which is commercially relevant[4]. SLC is assessed on multi-factor approach set in s50(3), not exhaustive or time limited.
To besubject to section 45 one of parties must be a “corporation[5]”, a contract, arrangement or understanding (CAU) with a purpose of substantially lessening competition (SLC). The purpose, effect or likely effect must be SLC[6].“Purpose” is defined in s4F and it needs to be substantial, although does not need to be the only purpose. “Substantial” means ‘important or weighty’,[7] identified based on commercial reality[8] and a counterfactual approach applying “the future without” and “future with” test[9] rather than short-run effects[10] readily corrected by market processes.[11]
The question refers to ALL involvedentities.
The purpose is considered on a subjectivebasis. I believe that it is more possible than not that certain Investment Managers and possibly certain large shareholders will fail the purpose test.
“Arrangement” is something whereby the parties to it accept mutual rights and obligations[12].“Understanding”requires a meeting of minds between parties with commitment to act or not to act in a particular way[13] by at least one of them pursuing it without any element of mutual obligation[14]. To arrive at an understanding or to make an arrangement there is no need execute them in writing: and courts will assess what has been said and what each party understood to be the position. For example, making a verbal demand to change prices or doing so through conduct[15].
“Competition”means competition in any market both as a supplier or acquirer[16], both actual and likely, verticallyand horizontally regardless of the format of the practice, applying to subsidiaries or body corporates relating to the corporation.
In additionto making or giving effect to CAU[17], the new[18] s45(1)(c) provides that a person must not engage with one or more “persons” in a “concerted practice” that has the purpose, or has or is likely to have the effect of SLC - broadens the scope. While CAU a concerted practice involves parties participating in a collective conduct instead of competing with each other and independently responding to market conditions.
“Concerted practice” is any cooperationorconduct likely to establish such cooperation in circumstances of competition’s uncertainty: no need to act in the same market, or the same time, or in the same manner. Reciprocity is not required: this captures anti-competitive conduct that falls short of CAU.[19] Concerted practice includes a communication that may not amount to an understanding but goes beyond a business independently responding to market conditions. This covers an express communication, and indirect communication (e.g.via intermediary) even without a direct contact.
SLC is assessed applying a 4-step test in Dowling vDalgety Australia Limited[20] identifying a market, assessing competition without offending conduct, then as it exists with such conduct and assess whether a difference in competition is substantial [21].
Fund Managers,Investment managers, etc who communicated information in relation to AMA without telling shareholders may have entered into an arrangement or understanding which may be in breach of s45 of CCA whereas determination will depend on factual circumstances with a focus on the “purpose.” Secondly, the question refers to “arrangement or understanding” requiring at least 2 parties to trigger s45 breach. Thirdly, although the question did not ask, s45(3)(b) may capture conduct which fell short of “arrangement or understanding” and there is no requirement to have 2 parties.
What’smore interesting? Any person engaged in “Concerted practice ” will be liable, including personally as the directors will be deemed “knowingly concerned” (if information surfaces that directors lent the shares to anyone who then engaged in dropping share price!).
Fines and Pecuniary penalties for breach of s45 of CCA are severe.
For corporations:
- $10 000 000;
- If Court can determine "reasonably attributable" benefit obtained, 3 times that value; or
- If Court cannot determine benefit, 10% of annual turnover in preceding 12 months.
For individuals:
- $500 000.
[1] includes shares
[2]CCA s4(4).
[3]Australia Meat Holdings Pty Ltd v TPC (1989) ATPR40-432 (Davies J) (Australia Meat).
[4]Russell Miller, n 45, 450; Rural Press Ltd v ACCC (2003) 216 CLR 53, [41].
[5]CCA, s45(1).
[6]CCA, ss45(1); 45(3)9a).
[7] Stirling Harbour Services PtyLtd v Bunbury Port Authority (2000) ATPR 41-752 (French J).[8] n 26.
[9] Russell Miller, Miller'sAustralian Competition & Consumer Law Annotated (Lawbook Co, 41st ed,2019) 448; OutboardMarine Australia Pty Ltd v Hecar Investments (No 6) Pty Ltd (1982) 44ALR 667, 669-70.
[10]SingaporeAirlines Ltd v Taprobane Tours WA Pty Ltd (1991) 104 ALR 633, 652 (FrenchJ, Spender J agreeing).
[11]Universal Music Australia Pty Ltd v ACCC (2003)201 ALR 636, [242].
[12]TPC v Nicholas Enterprises Pty Ltd (No 2) (1979)FLR 83.
[13]TopPerformance Motors Pty Ltd v Ira Berk (Qld) Pty Ltd (1975)5 ALR 465, 469 (Smithers J); ACCC v Leahy Petroleum Pty Ltd (2007)160 FCR 321, 332 [28] (Gray J).
[14]Morphett ArmsHotel Pty Ltd v TPC (1980) 30 ALR 88, 91-2(Bowen J).
[15]ACCC v Dermalogica Pty Ltd (2005) 215 ALR 482(Goldberg J).
[16]CCA, s45(3).
[17]CCA, s45(1)(a)-(b).
[18]Inserted by Competition and Consumer Amendment (CompetitionPolicy Review) Bill 2017(Cth); Competition and ConsumerAmendment (Misuse of Market Power) Act 2017 (Cth).
[19]Commonwealth, ParliamentaryDebates, House of Representatives, 30 March 2017, 3787 (Scott Morrison);Explanatory Memorandum, 28 [3.21].
[20] (1992) 14 ATPR41-165.
[21]Dandy Power Equipment Pty Ltd vMercury Marine Pty Ltd (1982) 64 FLR 238, 259.
