It is legal, GMD will own over 76% of DCN and will control the board and the future direction of the company. As long as the cost savings benefit both parties, then there is no issue. If services are sub-contracted, as long as the cost is apportioned in a fair manner, or at prevailing market rates there is nil issue. For example, If GMD wanted to toll treat at DCNs plant, they would have to pay market rates.
GMD is not halting the takeover, there is no reason they would. The 90% target means that GMD can compulsorily acquire all the DCN shares. At less than 90%, DCN and GMD will remain separate legal entities.
The DCN Board in my opinion, will not have anything to answer for with ASIC, as no counter offer came forward. No counter offer means that no other entity perceived GMDs offer to be too low, with them being able to offer a higher price and this make sense for their company going forward.
The reality of the situation, is GMD will own at least 76% of DCN, and will effectively control and manage DCN. Once the offer is transacted and the 76% plus DCN shares are converted to GMD shares. DCNs trading volume will drop off, as they will no longer be seen as in play. At this point GMD will likely look to delist DCN, as this will be in shareholders interest as it will reduce ongoing compliance costs. That will be justifiable, given DCNs multiple capital raises over the last few years.
And no I don't work for DCN or GMD. I'm just a punter sitting in my lounge, typing while watching Golden State play Phoenix in the NBA.
