Bowen Energy Limited 02R –Declaration of Unacceptable...

Bowen Energy Limited 02R –
Declaration of Unacceptable Circumstances and Orders

The Panel has made a declaration of unacceptable circumstances (Annexure A) and final orders (Annexure B) in response to a review application dated 3 September 2009 by Macrae Holdings (WA) Pty Ltd in relation to the affairs of Bowen Energy Limited (see MR TP09/61).

On 10 July 2009, Bhushan Steel (Australia) Pty Ltd announced an on-market takeover bid for Bowen at 14 cents per share. That bid closed on 26 August 2009. Bhushan had voting power in 58.81% of Bowen at the end of the bid.

On 24 July 2009, Bowen issued a target's statement attaching an independent expert's report by Horwath. The report included a "Revised Independent Valuation of the Coal Tenements held by Bowen" dated 23 July 2009 from Minnelex Pty Ltd. The report valued Bowen's shares at 3.53 to 5.51 cents per share.

The Panel considered that the circumstances were unacceptable because, among other things, there were material deficiencies in the Minnelex's 23 July 2009 report, regarding some of the values found, some of the logic involved and compliance with ASIC Regulatory Guide 111 and the VALMIN Code.

As a result of the deficiencies in Minnelex's 23 July 2009 report (and hence the expert's report) and information deficiencies, the acquisition of control over Bowen shares has not taken place in an efficient, competitive and informed market and shareholders in Bowen were not given enough information to enable them to assess the merits of the Bhushan bid.

The Panel made a declaration of unacceptable circumstances.

The Panel is still making inquiries in relation to association between Savni Holding Limited and Bhushan. The Panel agreed with the initial Panel in respect of the issue of the independent directors of Bowen (see MR TP09/60).

The Panel has made orders to the effect that the independent directors of Bowen procure a report by a new independent expert (satisfactory to ASIC) to provide a valuation of Bowen as at 23 July 2009. Further, the Panel has ordered that Bhushan must divest the shares it received under its takeover offer to accepting offerees who want them back. However, the Panel will not require divestment if the new independent expert concludes that the Bhushan takeover offer is fair and reasonable.

The sitting Panel was Catherine Brenner, Rodd Levy (sitting President) and Andrew Sisson.

The Panel will publish its reasons for the decision in due course on its website www.takeovers.gov.au.

Allan Bulman