Although reluctant to begin another thread there is one important aspect of the ‘best interest of shareholders’ that deserves separate consideration.
With both on-market and off-market takeovers, any target shareholder is able to decide for themself whether accepting a bidder’s offer is in their own personal best interest. Compulsory acquisition of their holding does not apply unless and until the bidder has obtained a 90% interest.
By choosing a Scheme of Arrangement and supporting it, the ResApp BOD has indicated its belief that it is in a better position to determine what is in all shareholders’ best interests than those shareholders themselves.
Without going into the particularly insulting nature of that attitude it does mean that the BOD considers one of the other alternatives, in which shareholders are able to decide their own future in the Company, to not be superior. The Scheme is the best.
An argument that an offer price is justified solely because it is higher than recent market prices is both trivial and naïve, but in any case the same offer made on- or off-market would be just as applicable.
Why giving shareholders the choice of determining their future is not in their best interests is well beyond my powers of perception. A rationalisation of the BOD’s attitude should be contained in the Target’s Statement of the Scheme Booklet, which will be worth reading.
Meanwhile an Independent Expert has the task of both justifying an offer price that demonstrably is nowhere near real value, and the choice of a Scheme that concludes that it is in the best interests of shareholders to not be shareholders.
Considering the Company’s much-vaunted exciting potential growth, someone who can successfully mold logic to reach those conclusions would be wasting their unique talent if it were confined solely to the area of investment valuations.
RAP Price at posting:
11.0¢ Sentiment: Buy Disclosure: Held
