Building a pre-bid stake or locking in a future purchase priceAs...

Building a pre-bid stake or locking in a future purchase price

As a result of the exemption in s609(6), these types of equity swaps can now be used to build or finance pre-bid stakes above the 20 per cent threshold, and can also be used to avoid detection below five per cent. However, the rules for substantial shareholder notices disregard the exemption in s609(6), and continue to require disclosure of interests in equity swaps or options which may be physically settled.

The equity swap can be structured to give the bidder the option of physically receiving the underlying securities at settlement, or alternatively to give the bidder the financial benefit of the securities during the swap period. The price for a subsequent purchase of a parcel of shares may be locked-in, with any movement in the value of the underlying notional parcel of stock during the term of the swap balanced by an equal compensating movement in the value of the swap itself. If the price of the shares rises in the period leading up to the acquisition, the additional cost of the underlying securities is met by the benefit gained from the swap.

Such a strategy could be used to complement a midnight raid, or guard against a premature leak that increases the share price, by reducing the total cost paid and giving the bidder a significant competitive (acquisition cost) advantage in any ensuing auction for shares.

The Takeovers Panel considered the use of equity swaps in 1997, in relation to dealing in Fairfax shares. Brierley Investments Limited (BIL) had acquired 19.98 per cent of Fairfax, and stated its intention to utilise the '3 per cent creep' provisions to acquire further shares. BIL entered into undisclosed cash settled equity swaps with Merrill Lynch, which hedged its position. ASIC took issue when BIL subsequently acquired Fairfax shares on market under the creep provisions, on days when Merrill Lynch unwound its hedge by selling similar numbers of shares on market. The Panel found no unacceptable circumstances; no obligation to disclose the swaps, and no breach of s606.

acknowledged source of above
http://www.aar.com.au/pubs/itd/may03/index.htm

Brierly Is the old company.GPT was created by disaffected directors with Ron Brierly the head after he was deposed? from the board and many origional shareholders followed from memory.

JUST REMEMBER BOYS AND GIRLS EACH SHARE HAS A VOTE IN WHATEVER PROPOSAL FOR RESTRUCTURING MAY ARISE.Someone wants the votes stacked their way i suspect.
Go in eyes wide open or stay eyes wide shut like i suspect most existing shareholders are.

I suspect the company may be in play as they say.

No doubt the coming months will either leave me with a holding of value or worthless shares