From the SIA (08/11/18) "14.1 This document may be terminated:...

From the SIA (08/11/18)

"14.1 This document may be terminated: …….. (c) (material breach) by either Miller (MMS) or Elliot (ECX)  at any time prior to 8.00am on the Second Court Date, if the other is in material breach of a term of this document …….."

Second court date has not passed.
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"11 Break Fee

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11.2 Payment by Elliot to Miller: Subject to clauses 11.3, 11.4, 11.6 and 11.8 Elliot agrees to pay the Break Fee to Miller without withholding or set off where the Scheme does not proceed because:....

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11.2 (c) (termination) Miller validly terminates this document in accordance with:
(i) clause 14.1(c); or​

(ii) clause 14.2(a)."

(page 4) "Elliot Material Adverse Effect means a Specified Event which has, has had, or is reasonably likely to have, either individually or when aggregated with any Specified Events of a similar kind or category:

(a) a material adverse effect on the business, assets, liabilities, financial or trading position, profitability or prospects of the Elliot Group taken as a whole; or

(b) without limiting paragraph (a):
(i) the effect that the value of the net tangible assets of the Elliot Group (taken as a whole) is reduced by at least $13 million, measured against the net tangible assets stated in the Elliot Group’s audited FY18 financial statements;
(ii) the effect that the value of the annual NPATA (being net profit after tax adjusted to exclude the after tax effect of the amortisation of intangible assets and material one-off adjustments or costs that do not reflect the ongoing operations of the business) of the Elliot Group is reduced by at least 10%, measured against the NPATA stated in the Elliot Group’s audited FY18 financial statements"

"8 Elliot conduct of business before Implementation
….

8.2 Specific obligations: Subject to clause 8.3 and without limiting clause 8.1 and other than with the prior
approval of Miller (which approval must not be unreasonably withheld or delayed) or as required by this document, Elliot must, during the period contemplated by clause 8.1, use all reasonable endeavours to ensure that Elliot and each member of the Elliot Group: ……
(k)  (no Elliot Prescribed Occurrence or Elliot Material Adverse Effect) ensures that, between the date of this document and 8.00am on the Second Court Date, there is no Elliot Prescribed Occurrence or Elliot
Material Adverse Effect;"

(page 12) "Reverse Break Fee means $7,255,753."

So, my interpretation is, that by dropping the ball with the latest profit downgrade, ECX has breached the SIA conditions (NPATA drop by more than 10% compared to FY18), and allowed MMS to legally terminate the SIA and claim the Break Fee. The Reverse Break Fee, which ECX could claim if MMS breached, was stated as 7.26 million, so 8 million for the Break Fee sounds about right. This would have been chased through legal channels, hence neither ECX or MMS will be able to comment further.

I don't see this as some stealth move by the ECX BOD. It seems like a simple SIA breach which has been punished by MMS as allowable under the SIA. I don't think it has anything to do with whatever other TO offers may or may not be floating around.

Take care with this one, and good luck to all.​