The Takeovers Panel

Reading parts of the (Australian) Corporations Act 2001 this morning (Chapter 6: Takeovers), I've just realise how complicated a takeover can be for the companies. For my own part (until recently), takeovers mean that I'll have a premium over my shares, i.e good news.

The last two recent takeovers I witnessed, however, was not really straight forward. The two companies have recently take their takeover problem to The Takeovers Panel:

1. Allegiance Mining (AGM - I owned and recently sold) made an application to the Takeovers Panel in relation to the off-market unsolicited takeover bid for Allegiance announced by a wholly owned subsidiary of Zinifex Limited on 17 December 2007
2. Mount Gibson Iron Limited (MGX - I still own them) just recently also applied to the takeovers panel regarding the conditional sale by Gazmetal Holding Cyprus of Gazmetal's 156 million shares (approx 19.73% of MGX issued capital) to hougang Concord International. MGX seeking a declaration of unacceptable circumstances.

What is the Takeovers Panel?

The Takeovers Panel is the primary forum for resolving disputes about a takeover bid until the bid period has ended. The Panel is a peer review body, with part time members drawn predominantly from Australia's takeovers and business communities.

I suppose The Takeovers Panels' central objective is to ensure fair treatment for all shareholders in takeover bids.

In both cases above, especially at Mount Gibson Iron's case, there are some grounds and reasons to believe that the bidders were not treating their targets fairly. The sale of 19.7% holding in Mount Gibson from Russian billionaire Alisher Usmanov to China's Shougang would give Shougang and closely related group APAC a combined 39.9% stake without having to launch an offer for the company. Although the two Chinese companies claim they are not related, institutional shareholders believe Shougang's plan is a convert takeover avoiding the standard takeover premium. Smell any fish?