Sorry this is a long post but the PGHendgame is subject to complex rules- most fraught with risks for RG. Much of this stuff has been discussed before. Getting to 90% would be only a first step for him, and not necessarily the best one. RG and the minority holders will all have their own views on share value and tactics, but RG’s potential actions must comply with a web of law and regulation in the Corporations Act, Takeovers Panel Guidance Notes and ASIC’s Regulatory Guides. I’m an accountant not a lawyer but I have spent a lot of time researching this area re PGH, and feel fairly confident about it. However, I’d be happy to be corrected by a corporate law expert.
Tradinator As William says he need 6.6M shares.Even if he pays say $1.50, it's worth it to him since he already has most ofthe company.
Yes and no. First,this assumes that holders of 6.6m+ are willing to sell to him- and perhaps theywould be at $1.50. I think we can safely say that all or nearly all of the 12% minority shares are held by people who are fully aware of what is happening, having received so many letters etc from RG, and have made up their own mind what to do from here and their view of the inherent value of PGH. Secondly the most important point is not getting to 90% but RG’s strategy after that. (Pls see my other posts below). I think the destiny of PGH will be decided by Manipur and the other top 4 or 5 holders: irrespective of what smaller holders might be willing to sell for. It’s also relevant that, if RG decides to amount a second takeover bid, he would have to offer a price of at least the highest he paid in the preceding 4 months. For example if he went aggressively into the market after 7 December, say up to $1.50, and then wanted to mount a second takeover, he would either have to offer at least the highest price that he had paid on market or wait for a four month gap if he wanted to bid at a lower price (which probably wouldn’t succeed to flush out the big holders anyway). I think going aggressively into the market to scoop up 2% is unwise as it would just push up the floor price. In any case holders like Manipur will have a clear view of what they seek for their shares and would not be influenced by what smaller holders sold for on market. In the end, RG will have to pay what Manipur and the other big holders want if he is to get 100%. If he chooses the other possible route to CA (under s664A, which is not a takeover) -as I describe in the other posts- that also has its risks, including the need to get an expert valuation and that any of the minority holders can go to court to object to the price or terms.
bottomfeeder1Thereis nothing stopping Ruffy from buying the 2% he is short from the 90%.
True- assuming that people arewilling to sell 6.6m shares to him at an acceptable price. BUT it’s whathappens after that that matters.Please see my previous posts on 12/6/24 re a second bid and/or Compulsory Acquisition [#74273694, #74284872, #74279148, #74274779]. To be able to use the CA power a bidder has 2 options: one is the general CA power (NOT by takeover) in s664A. That might appear simpler but it could be riskier for RG (per my posts above). The other way is to mount a second takeover (s661A). Under that he would need to get both at least 90% and at least 75% of the shares that he didn’t own at start of a second bid. RG now has 88.04%, so the second hurdle means he must get at least another 75% of [100- 88.04]% = 8.97%. I.e. he would have to reach 88.04% + 8.97% = 97.01% to be able to use CA under a (second) takeover Most people are aware of the 90% CA hurdle, but many don’t know that the other 75% hurdle must also be met in takeovers
So yes after 7 December he could buy up to 3%, and if he bought only 2% that would give him 90.04% (assuming that holders of 6.6 million shares were willing to sell to him, and at what price?). BUT that would only satisfy the first of the takeover CA criteria. He also must reach 97.01% if he wants to use CA with a (second) formal takeover. That is why RG was desperate to get over 90% on the first bid (when the other hurdle was a less onerous 50% + 75 %(100-50) = 87.5%.) Hence in the bid just finished the harder hurdle was to reach 90%; in a second takeover the 90% hurdle becomes redundant as he would also need to exceed 97%.
It’s true that RG can use the creep after 7 Dec to hit 90%, but this won’t get him CA (unless he then used the s664A route). I reckon he would be better to stay out of the market entirely to avoid pushing up the price. If I was in RG’s place I would find out what price Manipur would demand for its 6.59%, check that that price would be acceptable to the next 4 or 5 biggest holders, and then announce a new takeover bid near that price. Of course any such exchange of ideas must be done very carefully to avoid breaching the Corps Act.
All of us (smaller) minority holders should be patient. We can’t alter the outcome anyway. I doubt that RG will want to stick at 88% forever, just to make us squirm. He could, but that would be inconvenient and uncommercial for him in several ways. This drama will eventually be sorted out by agreement between RG and Manipur- no doubt at a much higher price than 84c. As RG has 88% he has every reason to want Pact to prosper, including the cost reduction measures and productive use of cash flow, so the inherent value of PGH should rise. I think it’s likely that PGH won’t pay divs for a while, but minority holders should have expected that and not got bothered about it. This saga may take another 12 months or more to wrap up, but holders should do very well by being patient. The unknown factor is whether TIC and RG will fight their other depute out in court in April 2025, or whether they both prefer to settle that action before then, and leave the matter of ownership not to be exacerbated by that legal battle.
Not advice. DYOR.
