Management and Value Creation. More to come?, page-34

The Australian Securities and Investments Commission (‘ASIC’) states in its Regulatory Guide 6 (2013) that it may apply to the Takeovers Panel to seek a ruling of ‘unacceptable circumstances’ if creeping does not entail a gradual and open increase in voting power. In the light of that focus on 'open and gradual' consider IMC's gain in voting power after they exercise the options - it is neither open nor gradual. In fact it is truly extraordinary. In normal circumstances companies creep slowly, often below the 3% level because the more voting power they get the more competition there is for the shares on offer and they don't want to signal their TO intentions So the likes of IMC in normal circumstances would have to pay a lot to buy shares above 30%, and they may do so off market so as not to alert other share holders. But here we have IMC getting a massive increase in voting power beyond 30% as part of a deal that share holders were not privy to and which was not gradual and at a fraction of asset value. It also violates the principle that all shareholders have reasonable and equal opportunity to participate in any benefits. This is the point that NB and others have been making, IMC get access to the benefit and we do not because we are not part of the RI.