To avoid any doubt the 2 thresholds (i.e. 75% and 90%) apply in any bid: see S 661A1 of Corps Act. You are right that the 90% rule is the one that gets all the publicity.That is because in nearly all bids the 75% rule is redundant (i.e. it is overpowered by the 90% condition), because the bidder usually has a much lower starting holding- typically no more than 20%.The crossover point where the two rules equate is where a bidder has a starting holding of 60%.If he has fewer than 60% at the start, the 90% rule is the only one that matters. If he has over 60%, then the 75% rule is a tougher condition to satisfy than the 90% level.In PGH’s current bid, RG started with 50.001%, so under the 75% rule RG must reach over 87. 5% to use CA. However, the other limb says that he must achieve over 90% to use CA, and that is clearly tougher—hence people only talk about 90%. This is by far the most common example.In a very small number of cases, a bidder may start with over 60%: in that case, it is the 75% rule which is the tougher condition to satisfy. That rule would be the one that RG would worry about, if he had to start a new bid with anything over 60%- and of course 87% or 88% would be such a case.
Re Bris Connections. That was a notorious case which was I think the first high-profile adventure run by Nick Bolton. He is very smart but some consider unscrupulous. He has a reputation for pushing the law to uncomfortable extremes in some cases. In Bris Con he did receive several $m for selling the voting rights involving partly paid units that were almost worthless and there was a liquidation risk for the project.That part was clever.However, he took a huge risk involving a put option with another party re being willing to pay a huge capital call on the units.If you have the patience it’s a fascinating case and the judge’s opinions were very critical.Nothing to do with takeovers, but an interesting and extreme case of corporate greenmail.Very clever but legally dubious.
My own position. I did buy into PGH when the first bid was made, because the price was absurd. I decided to sell (ON MARKET at 86c, not to RG) after RG increased the price to 84c and made it final.I reckoned there were 2 possible outcomes: either RG would win in which case there was no point waiting; OR he would fail and very likely come back for another go, with PGH remaining listed until all that happened. When the dust settles I am happy to buy in again. PGH is a good business and worth MUCH more than RG is offering (of course). I only ever had $40K invested.I am currently tied up in some big illiquid stocks, and a 2m holding in HUM- which continues to be painful but I’m convinced will eventually come good.Despite selling I’m following the tactics in PGH with great interest.
PGH Price at posting:
85.5¢ Sentiment: Hold Disclosure: Not Held
(20min delay)
