High hurdles

The Takeovers Panel is a fine institution; it rules on takeover disputes a lot quicker than the courts and comprised of mergers and acquisitions specialists, it also has a far greater in-house source of expertise. But what companies are finding out is that the Takeovers Panel sets a pretty high hurdle before it conducts proceedings, let alone declares unacceptable circumstances.

Still, that didn't stop Hong Kong-based Noble Group from having a crack in late February when Gloucester Coal, in which Noble holds 21.7 per cent, failed to respond to a $4.85 cash offer and continued to back an alternative scrip bid with New South Wales peer Whitehaven Coal, despite the fact that the Whitehaven deal was implicitly worth 32.9 per cent less to Gloucester shareholders (Noble gets savage, February 27).

Gloucester and Whitehaven had earlier entered into a merger implementation agreement whereby one Gloucester share would be offered for every 2.45 Whitehaven shares; effectively a reverse takeover. Noble, an international commodity trader run by expatriate Englishman Richard Elman, did not support the offer and says it was not consulted, saying it had "serious concerns” (Raising Noble's ire, February 24).

The Takeover Panel this week ordered that Gloucester amend its reverse bid for Whitehaven and insert a "subject to no superior offer” clause. Noble views theirs to be a superior offer, yet Gloucester continues to back a tie-up with Whitehaven. Sadly for Noble, the Panel can't exactly rule on what is "superior”, but at least it is a step closer it said.

"In structuring the Whitehaven merger the Gloucester board deliberately sought to deny its shareholders the opportunity to consider alternative bids through an auction process," said Noble Energy director Will Randall.

"We are disappointed by the conduct of the Gloucester directors and their disregard for the views of their shareholders. Why would they trade-away control of Gloucester by proposing an all-scrip takeover, while locking up their ability to consider other potentially superior offers?"

Gloucester says that together with Whitehaven it is worth more than $4.85 per share in cash and that Australia's third biggest independent coal producer would be created. Gloucester and Whitehaven quickly dispatched a combined 500 pages of bidder's and target's statements to that effect. However, it will ultimately be up to shareholders to decide.

Shareholders will also get to decide on another arrangement. This time, one that both the Takeovers Panel and ASIC have declined to intervene in.

Last month, a group of three former Equigold directors – Mark Clark, Nick Giorgetta and Morgan Hart – announced themselves on the Regis Resources registry and asked shareholders to vote to place them on the company's board. The Equigold three also asked Regis shareholders – the bulk of whom are institutions – to vote out Regis's current directors, David Walker, Paul Dowd and none other than former ASIC chairman Jeffrey Lucy (Regis tussle heats up, April 15).

Regis's board said the Equigold mutineers had failed to declare their substantial interest and complained to the Takeover Panel, only to see that complaint passed over. A subsequent request for ASIC to intervene also failed to illicit the corporate watchdog's interest. Notwithstanding the Lucy connection and despite recruiting such stars as Martin Kudnig from Blake Dawson and Takeover Panel expert Rodd Levy from Freehills, the Equigold requisitioned meeting will go ahead on Monday.

Regis is also being advised by Neil Johnson and Joe Matthews from CIBC World Markets, while Clark and co have retained Jonathan Murray of Steinepreis Paganin.

Over at the battle for Gloucester, Noble is being advised by Andrew Clarke and Chris Fraser from Citigroup and Karen Evans-Cullen and John Elliott from Clayton Utz. Campbell Stewart, head of resources at UBS, is advising Gloucester, along with Freehills M&A partner Tony Damian on the legals. Doug Bartlett and Atagn Bensan from Grant Samuel are advising Whitehaven, as is Wayne Seabrook from Wilson HTM and Damien Clarke from law firm McCullough Roberts.