The IBC letter today is the first utterance from them in about...

The IBC letter today is the first utterance from them in about 7 weeks, and is long overdue. I guess that the IBC’s lawyers have told them that IBC’s duty as directors overrides their agreement (very poor judgment) to use best endeavours to support Bennamon’s bid, and that they must therefore issue something after the intervention of TOP. Not to do so would have left the IBC looking like an impotent puppet of the bidder. Their letter is indeed an improvement on what the bidder wrote, but it still has several flaws- see below. It is not robust or balanced.

Takeovers Panel wasasked to review some correspondence sent by Kin Group to certain shareholders………

Did we ever discover which shareholders (like Manipur) did not get it? The TOP work seems silent on that.

This review has led toBennamon undertaking to issue further correspondence to shareholders…..

That is a weak way of putting it: TOP has, in essence, ordered the bidder to do this, as an alternative to conducting formal proceedings. Moreover it is not merely “further correspondence”: it is a formal supplementary bidder’s statement, and is thus governed by the takeovers part of the Corporations Act. Note also the subtle but unstated difference- this “further correspondence“ must go to ALL shareholders, and not omit Manipur and some others. It’s noteworthy that within that one sentence the IBC has used three choices of words to water down what has been required by TOP. Not for the first time, it reads as if this letter from IBC has been drafted by the bidder’s lawyers!

The IBC continues torecommend that minority shareholders accept the offer… If that persists,shareholders may need to carefully consider if selling on market (afterbrokerage and other costs) might achieve a better outcome…

Note the change of emphasis here- the IBC recommendation is ONLY to accept the bid. There is a much weaker, secondary comment that shareholders “may” need to “consider” selling on market for a higher price and (not stated) to get cash much quicker. The IBC can’t bring itself to include this in its “recommendation” when in fact selling on market for a higher price and faster payment is clearly better than the IBC’s sole “recommendation”. Nor does the IBC acknowledge that some holders may consider that both alternatives are undesirable and that they want to hold on because they believe PGH is worth much more than say 85c. Again, it reads as if the bidder’s lawyer drafted it!

If you are in anydoubt as to the action you should take in relation to the offer, you shouldcall the Pact Shareholder Information Line…

In my experience with other bids, such “Info Lines” are not impartial- they are solely about process and follow a script. If someone wants to call and say “I don’t want to accept the bid” the Info Line is likely either to try to dissuade you or be left mute as it has nothing in its script of what to say! If anyone does call, please post a narrative of what happens- if only for a laugh.