XIP (ASX) News: XIP IPH Ltd Requests Xenith Board Defer Date Of Scheme Meeting To Vote On QANTM Merger

Originally posted by adrianl456: ↑

I'll guess we will see over the next couple of weeks. ACCC announcement due tomorrow which could shatter the ambitions for all the players! (Highly unlikely).

You're right, everyone has a price, just that some will be higher than others. Whether IPH get enough support, say anything above 60%, to proceed with their Rupert Murdoch like ambitions, we will know at the time of the first vote. Don't forget, IPH can't compulsory acquire until they hit 90%, even though they can start passing resolutions from 50%

If they get enough to make it uncomfortable for the hold-outs then we may seem some vendor principals accept the money and walk, setting up elsewhere. "Shelston, Hack, Watermark and Glasshouse" has a nice ring too it!

The interesting thing that would come about though, if they (IPH) don't garner much support at the first vote. They know they have their own 20%, but surely he (Blattman) would want to see quite a few more shares vote against the merge. If I was him, anything less that 40% against would make things difficult for them going forward.

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There is also an avenue via the Takeovers Panel to resolve any issues between IPH and XIP concerning the takeover.

Under Chapter 6A, the percentage number may not necessarily be 90% for compulsory acquisition, but actually lower. A bidder under a takeover bid may compulsorily acquire remaining shares if the bidder and their associates have acquired at least 75% of the shares that the bidder offered to acquire under the bid. In this case, its 75% X (1 - 19.99%) = 60.0075% of XIP shares. It'll get to 57.7% if the institutions sell, so there's only 3% to get from other shareholders. This is a much easier target level to reach.

Lack of support of a major shareholder was the most common cause of deal failure in a takeover in Australia.
Hostile bidders can up their initial consideration to increase the likelihood of obtaining a recommendation from the target.
Historical Australian corporate data shows that 85% of takeovers will succeed.
64% of hostile takeovers ultimately have their reject recommendation changed by the board of the target to an accept recommendation.

It is typical for directors of the target to reject an initial hostile offer, as they are acting in the best interest of the shareholders. That said, sometimes management's judgement about the adequacy of the initial offer can be clouded because, price aside, they are usually defending their jobs and pride.

I'm watching today all those XIP shares getting soaked up between 1.795 and 1.815 today. Well below the $1.85 paid by IPH for the 19.99% at $33 million, and alot lower than the $2 value of the takeover offer.