Panel Publishes Reasons for Stopping Reliable's Bid in Pinnacle 4 [10/05/2001] The Takeovers Panel

Thursday 10 May 2001

Panel Publishes Reasons for Stopping Reliable's Bid in Pinnacle 4

The Takeovers Panel advises that it has published its reasons for a declaration of unacceptable circumstances and orders in relation to Reliable Power Inc's takeover bid for Pinnacle VRB Ltd announced on 22 January 2001 and made on 20 March. The Panel received the application on 15 March and announced its decision on 9 April.

Pinnacle said that Reliable's bidder's statement did not give sufficient information for Pinnacle shareholders to assess Reliable's bid, whether Reliable could pay for all the shares under the bid, and who would control Reliable after the bid.

On 4 April 2001, the Panel declared that circumstances in relation to Reliable's Bid were unacceptable on the basis that Reliable's lack of sufficient funding arrangements detracted from an efficient, competitive and informed market in shares in Pinnacle. The Panel said that Pinnacle shareholders did not have enough information to enable them to assess the merits of Reliable's offer. On the same day, the Panel also made interim orders restraining Reliable from dealing with any Pinnacle shares for which it received acceptances under the Bid. The Panel also repeated earlier requests that Reliable promptly produce evidence that it has sufficient funding arrangements in place. The Panel said that it would stop the bid if Reliable did not produce the evidence that the Panel required.

On 9 April 2001, the Panel concluded that Reliable had not demonstrated to the Panel's satisfaction that, through its financier, New West Capital LLC, Reliable had sufficient funds in place for the purpose of paying for acceptances received under the Bid. The Panel therefore made orders stopping Reliable's Bid from proceeding.

Subsequent to the making of these orders, Reliable applied to the Panel for a review of this decision. The Review Panel upheld the declaration of unacceptable circumstances made by the Panel in this matter, but decided that the new information which Reliable provided to the Review Panel in relation to its funding arrangements was adequate to allow Reliable's bid to proceed. Reliable's Bid is therefore now proceeding.

The Panel also published its reasons for not starting proceedings in Pinnacle 7.

The reasons for the Panel's decision in this matter are available at the Panel's website at http://www.takeovers.gov.au/Decisions/decisions.htm .

The Panel for this matter was Marian Micalizzi, Louise McBride and Robyn Ahern.

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