Panel Affirms ASIC Refusal to Allow Troy to Waive Condition [12/12/2000] The Takeovers Panel

Tuesday, 12 December 2000

Panel Affirms ASIC Refusal to Allow Troy to Waive Condition

The Takeovers Panel advises that it has today affirmed ASIC's decisions to refuse to allow Troy Resources to waive the defeating condition in its bid for Taipan. The Panel received an application from Troy on Friday 8 December, for a review of ASIC's decisions.

On 2 November and 5 December ASIC refused Troy's application to waive the pre-condition, then defeating condition, attached to Troy's bid that a merger between Taipan and St Barbara Mines not proceed. ASIC had previously required the condition to be non-waivable.

In affirming ASIC's decisions, the Panel said that ASIC's decisions were intended to ensure that the terms of Troy's bid were consistent with Troy's public statements from 19 September until 29 November that its intention was that its current bid would remain subject to the defeating condition.

The Panel also said that it would not regard a fresh bid by Troy, after the current bid closes, as unacceptable merely because it was unconditional.

While Troy did not unequivocally rule out waiving the condition, it did not protest against or challenge the first ASIC decision until 27 November. The overall impression given by its public statements was that the bid was conditional on the merger between Taipan and St Barbara not proceeding, thereby offering Taipan shareholders a choice between mutually exclusive alternatives.

Many of the acceptances received by Troy under its current bid were obtained while Troy maintained that public position. The Panel therefore agrees with ASIC that in the interests of an informed market, Troy should not be able to free the current bid from the defeating condition.

The Panel went onto say that had it allowed Troy to waive the defeating condition, it would have required:

  1. Troy to extend its current bid for a sufficient period of time to allow Taipan shareholders to assess the merits of the revised bid and to ensure that Taipan shareholders were not subjected to coercive time pressures in deciding whether or not to accept the bid;
  2. Taipan shareholders who have already accepted Troy's bid to have a reasonable time to withdraw their acceptances; and
  3. full and clear supplementary disclosure of Troy's intentions, including its intentions in relation to:
    1. representation on the Taipan board;
    2. completion of the proposed merger between St Barbara and Taipan; and
    3. the merged entity, if the merger proceeds.

Having regard to the need to update the bidder's and target's statements and to the time of year, the Panel said that a revised bid would have been required to remain open until late January 2001. A fresh bid would satisfy the requirements set out above, and would not be much slower or more expensive to make than such a variation to the current bid. It would also have the advantage of marking a break with the original bid. Shareholders in St Barbara and Taipan would not be adversely affected by such a bid being made.

The Panel said that to reduce confusion amongst Taipan shareholders, a new bid should not commence until after the close of the current bid.

The sitting Panel for this application is Simon McKeon (President), Professor Ian Ramsay and Denis Byrne.

Nigel Morris
Director
Corporations and Securities Panel
Level 47 Nauru House, 80 Collins Street
Melbourne VIC 3000
Ph: +61 3 9655 3501
nigel.morris@takeovers.gov.au