One thing I am a bit lost on, is if pashe two is enacted... Why...

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Mr.Lumin

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16/04/24

22:27

Post #: 73376605
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Originally posted by Mr.Lumin: ↑

Ok, so other posters please correct me if im wrong, but this is how I percieve it:

Firstly, the 'Scheme of Arrangement':
The company (JPower) has entered into a binding Transaction Implementation Deed with the support of the Genex Board to acquire all of the ordinary shares in Genex (Genex Shares) that J-POWER and the Excluded Genex Shareholders do not already own by way of a members’ scheme of arrangement for A$0.275 in cash per Genex Share (Scheme Consideration) (Scheme).

^ This means they have made the proposition with the board, the board has OK'd it, they have looked over the books, and they are proceeding as long as its OK'd by the 'courts' (the authorities) and then voted for and accepted by shareholders.

In the case it is not accepted by majority of shareholders (50.1%) they will move to phase two.

Phase two, the 'off market takeover bid':
The company (JPower) has allerted us, and anyone who wants to sell (and is thus likely to vote yes) that if the majority of shareholders vote no, or the courts reject the acquisition, and therefore the sale does not go through, they will offer to buy those shareholders shares who want out for the price of 27 cents per share any way.

This means for example if 55% of shareholders vote no, JPower can and will offer to buy the shares of anyone who wants out giving them an exit point and their offer price will be 27 cents per share.

Basically, if we vote no, management and any other large investors can still exit if they wish.

By doing this (phase two), JPower are ultimately (at least in my mind) commiting to obtaining a "cumpolsory acquisition".
Technically, it wouldn't be classed as a 'hostile takeover' because the BOD are in favour of the deal.

However, the first option is the easy option for them. If they have to go to phase two it means they'd have to eventually acquire 90% of shares to obtain control as well as 75% of shares they don't already own.

At least all this is my undertstanding. @freespins or anyone else, if you learn more or I have got something wrong, please inform me. I'd love to learn more and admittedly it took me some time to understand all this myself.

See here for more detailed reading: https://content.allens.com.au/the-allens-handbook-on-takeovers-in-australia/transaction-structures/

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One thing I am a bit lost on, is if pashe two is enacted... Why would shareholders who have voted no opt to sell for 27cents?

Meaning theoretically JPower would have to come back with higher bids in order to reach 90% and tick the box for 'Cumpolsory Acquisition'?

Is this right? Can Jpower come back to shareholders who initially refuse the 27.5 cent offer, and then refuse the 27 cent off-market offer, with a higher offer?

And if they can/must, won't shareholders who sold for 27 cents be kicking themselves?

Any help appreciated.

GNX Price at posting: 27.0¢ Sentiment: Hold Disclosure: Held
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