Panel Agrees Settlement of Dispute Over AIF Bidder's Statement [09/05/2000] The Takeovers Panel

Tuesday, 9 May 2000

Panel Agrees Settlement of Dispute Over AIF Bidder's Statement

The Takeovers Panel today advised that it has decided not to make a declaration of unacceptable circumstances in relation to the bidder's statement of Australian Infrastructure Fund Limited (AIF ) in its bid for Infratil Australia Limited (Infratil ). The decision means that AIF will be able to dispatch its bidder's statement from the same date, 10 May, 2000, as it would have been able to after it lodged a revised bidder's statement with ASIC on 26 April, 2000.

The Panel, comprising Mr Brett Heading, the sitting President, Ms Alice McCleary, deputy President, and Ms Jenny Seabrook, announced today that the Panel has determined the application following a hearing on 8 May, 2000. The application was lodged on 2 May, 2000.

The Panel has decided not to make a declaration of unacceptable circumstances. It reached this decision on the basis of an undertaking from AIF that it will provide an additional statement to go with the bidder's statement. The Panel has reviewed the content of the additional statement, and the parties have agreed to the contents. The Panel considers that under the proposal, shareholders of Infratil will have sufficient information to assess the merits of AIF's offer for Infratil shares.

Mr Heading said that the Panel members were pleased with the speed with which the Panel had been able to reach its conclusion, and said he thought the outcome was a very sensible and practical solution. He said that this was in large part due to the cooperation and assistance of the parties.

Mr Heading said that the Panel will publish the reasons for its decision shortly.

The additional document will set out a range of information for target shareholders which was considered appropriate in this particular bidder's statement, including:

  • A review of AIF's combined company/trust structure;
  • A review of some features of stapled securities, and the proportions of value which flow to the holders of AIF stapled securities from the trust's distributions and from the company's dividends;
  • An analysis of the differently taxed elements which make up the distributions and dividends from AIF's stapled securities;
  • A generic review of the particular taxation issues associated with this bid;
  • A list of the AIF continuous disclosure documents that the directors of AIF consider most relevant to Infratil shareholders in assessing AIF's bid. The bidder will offer to post a copy of those documents to any Infratil shareholder who asks for them. It will also provide a 1800 number for Infratil shareholders. The bidder's statement will also provide details of AIF's web site where all its continuous disclosure documents are available;
  • A balance sheet which shows AIF's balance sheet as at 31 December, 1999 based on external valuations; an internal valuation of Infratil's assets which Infratil published on 21 February, 2000, in a similar format to the AIF balance sheet; and a pro forma net asset statement of the merged entity, using figures from those two sources;
  • An analysis of the components of AIF's distributions, and sources of earnings, over the previous three years;
  • A statement by AIF's directors setting out the reasons why they cannot prepare reliable projections for AIF's future earnings to be included in the bidder's statement;

In addition, AIF has undertaken to the Panel that its bid will not close until at least a week after the announcement by AIF directors of the level of distribution from AIF for the six months ending 30 June, 2000. The Panel thought it appropriate to require this information to be available to Infratil shareholders given that the directors of AIF considered themselves unable to provide forecasts or projections of the level of distributions from AIF stapled securities.

AIF and Infratil have agreed to cooperate with each other in getting the bidder's statement and target's statement to Infratil shareholders as quickly as possible.

For further information, contact:

Nigel Morris
Corporations and Securities Panel
Level 47 Nauru House
80 Collins Street
Melbourne Vic 3000
(03) 9655 3501

Mr Brett Heading
Sitting President
Corporations and Securities Panel
07 3233 8956
0409 608 966