AuIron Energy Limited – Panel Refuses AuIron Energy Ltd Application [22/09/2003] The Takeovers Panel

Monday, 22 September 2003

PANEL REFUSES AUIRON ENERGY LTD APPLICATION

The sitting Panel has decided to make no declaration or order in relation to the application by Westchester Financial Services Pty Ltd regarding the meeting of AuIron Energy Limited to seek approval by AuIron shareholders of the acquisition by AuIron of the Yarrabee Coal Company Pty Ltd, in exchange for a substantial interest in AuIron.

The meeting was held on Friday 19 September, and approved the acquisition and the issue of shares in AuIron to the vendor of Yarrabee, which will hold 48% of the shares in AuIron, with options to subscribe for more shares. The transaction cannot proceed immediately, however, as AuIron and the vendors have undertaken to the Panel not to complete it (or withdraw from it) without giving the Panel notice.

Westchester submitted that unacceptable circumstances had arisen in relation to the acquisition of Yarrabee for three main reasons:

(a) the notice of meeting and accompanying independent expert's report did not adequately analyse the value of the Yarrabee acquisition and particularly did not adequately assess the value of AuIron's other assets and the alternatives to the Yarrabee proposal;

(b) the documentation regarding the acquisition did not comply with the requirements of the London Stock Exchange's Alternative Investments Market leading to AuIron losing its listing on AIM; and

(c) no substantial shareholder notice had been filed in relation to in excess of 5% of the shares in AuIron which are held by a nominee for Williams de Broe plc, a London stockbroker, mainly on behalf of its clients, and Williams de Broe had indicated that it would vote those shares in favour of the resolutions for the acquisition of Yarrabee.

The Panel will provide reasons for its decision as soon as possible. In the meantime it advises that it was not satisfied that the notice of meeting and independent expert's report were misleading or materially deficient, that the loss of the AIM listing had any coercive effect on AuIron shareholders or that there was any misuse of the votes attached to the Williams de Broe client shares.

Once time expires for an application for review on Wednesday 24 September, the sitting Panel will be prepared to allow the acquisition and share issue to proceed.

The sitting Panel is made up of Jeremy Schultz, Marian Micalizzi and Alice McCleary.

George Durbridge,
Director, Takeovers Panel
Level 47 Nauru House, 80 Collins Street
Melbourne VIC 3000
Ph: +61 3 9655 3553
george.durbridge@takeovers.gov.au