takeover rumour, page-27

Gareth - it has been a few years since i looked at compulsory acquisition in detail. However, there are two scenarios:

1) comp acq in the aftermath of a takeover bid

2) comp acq in any other situation (eg. you've crept to 90% or have sat at 90%+ for a period of years, and now want to mop up)

In situation 1) comp acq is a relatively straightforward process where you just pay the same price to all outstanding holders as you paid under the bid. HOWEVER - you don't have an automatic right to compulsory acquisition in this situation just because you are over 90%. In fact - there are two limbs: 1) you have to be over 90%, AND 2) you need to have received acceptances under the bid from at least 75% of the the shares that you didn't own at the start of the bid period. Therefore - if you started with an 80% shareholding, you actually need to get to 95% through the bid process to be entitled to comp acq.

In situation 2). . . . .an independent expert selected by ASIC - i think - needs to opine on whether the proposed buyout price is fair and reasonable. Can't remember the methodological basis that is meant to underpin this assessment. eg. does it include a premium for control?

Anyway - we got our next clue yesterday re where this is going. . . . .with the buyback being upscaled again.