Panel Declines Application in Relation to Equity-1 Resources NL [12/12/2002] The Takeovers Panel

12 December 2002


The Panel advises that it has today declined to commence proceedings in relation to an application by Equity-1 Resources NL (Resources) for a declaration of unacceptable circumstances and orders in relation to an announcement of a proposed takeover bid by Equity-1 Limited (Limited).

Resources asserts that the announcement of the proposed bid by Limited on 3 December was intended to disrupt a meeting of Resources and that this constitutes unacceptable circumstances. The meeting was in the process of considering a number of resolutions to approve a change to Resources' activities (including a proposed investment in MIS Orthopaedics). The meeting was subsequently adjourned to Friday 13 December 2002.

Resources sought orders that Limited not proceed with the proposed takeover offer. Alternatively, Resources sought orders that the proposed takeover offer proceed as currently announced and that Limited not prevent the adjourned annual general meeting from occurring at the designated time and place.

The Panel considers that, on the facts currently before it, the announcement of the takeover bid by Limited does not constitute frustrating action and does not prevent Resources' shareholders from making an informed decision in relation to the resolutions to be considered at Resources' adjourned meeting. The Panel has therefore declined to conduct proceedings on the application before it.

However, the Panel is concerned at the adequacy of information currently provided to Resources shareholders. The Panel notes its concerns in relation to:

  • the information provided by Resources in relation to its proposed investment in MIS Orthopaedics: and
  • the information provided to Resources shareholders by Limited in relation to the details of the bid, the future direction of Resources under Limited controllership and the relationship of Limited's proposed takeover bid with a proposed share placement Limited requested Resources to make to it.

The Panel has advised both Resources and Limited that it considers that there appears to be a risk that Resources shareholders may be being asked to make material decisions about the future ownership, control and direction of their company with inadequate information.

The Panel advised that, although there are a number of issues of potential concern in relation to both transactions, which may warrant future applications to the Panel, it considered it appropriate to allow the promoters of those transactions the opportunity to address those issues rather than interfere prospectively on the basis of the current application.

The President of the Panel appointed Meredith Hellicar, Andrew Lumsden and Brett Heading to consider the application.

Nigel Morris
Director, Takeovers Panel
Level 47 Nauru House
80 Collins Street
Melbourne VIC 3000
Ph: +61 3 9655 3501