Ann: Becoming a substantial holder, page-2

This is getting more interesting now…

Harvest Lane Asset Management are specialists at making short term gains from M&A situations.

http://harvestlaneam.com.au





They are not long term investors, so they will seek to profit from this takeover before it expires.
They have bought on market at 28.5 to 29c, so they will be looking for an increased bid over 29c.

I suspect the large buyer in market at 28c ahead of the bidder is also Harvest, or someone else with similar strategy.
That could give these strategic buyers a blocking stake, preventing the bidder getting to 90% ownership required for compulsory acquisition without thier support.

This takeover is a little different to most. In most cases the bidder has a similar business and they need full ownership in order to integrate their existing operations with the acquired one.
In this case, the bidder is simply an investor and may be happy to be a large shareholder in a continuing, listed company.
Thus the blocking stake may be a less valuable negotiating benefit here, (That would be my argument if I were the bidder)

Sill plenty of time to wait and see how this pans out.
The target statement is due within 15 days of the bidders statement being despatched, so I expect that late this week or early next.
The bidders offer is open until 9 Sept, if they extend the offer or increase the price it generally must be done at least 5 trading days before the end of the offer,
so the negotiations can continue until 2 Sept.


However if the current market sell off continues, I personally may be tempted to take the offer available now and use the cash to pick up some other longer term investments at highly discounted prices.