Yeah so there's the minimum bid price rule under the...

Yeah so there's the minimum bid price rule under the Corporations Act that dictates how long WGX have to wait to return with another offer (assuming it's priced lower).


Because the rule applies at the security level and not the company level, the offer price can't be adjusted alongside an increase in the amount of shares on issue. Currently, Westgold cannot offer less that the 0.25 WGX per GCY ratio, which is why they are now seeking consent to withdraw the bid - waiving the FFR merger condition would mean the ratio equally applies to the new GCY shares issued to the incoming FFR shareholders.

To be able to return with a lower offer, WGX will need to wait four months so as not to be in breach of this rule. Whether a lower priced offer is still appealing to GCY shareholders is another question.

A few references for those that want to understand more:

Takeovers Panel: Guidance Note 6 - Minimum Bid Price Rule
ASIC: Regulatory Guide 9 - Takeover Bids