ATM - A2 Milk Corporation Limited

[Harrie]

Initially a2mc stated that it was not a takeover offer. I guess what that could have meant was that it was not a formal offer. It was just a friendly proposal to see how a2mc would react to a formal offer for all the shares.
I doubt that the terms of the expression of interest would have changed in its intent over just a day.
In this case then I go along with what KW is saying. But it is still not a formal offer yet.

[robbo24]

No its very clearly a full takeover offer. "an expression of interest from two parties with respect to anacquisition of all of the shares in a2MC."
Now whether that actually eventuates is another question.

That's the point, its NOT! Its an expression of interest. For all of the shares. At some point it may become an actual takeover offer. Or it may not. But they have stated the terms of the expression of interest (all of the shares) and the market is reacting to that. To do otherwise will attract penalties for misleading and deceptive conduct and market manipulation.

These two quotes convey different messages, then, don't they?

[Snoopy]

No its very clearly a full takeover offer. "an expression of interest from two parties with respect to anacquisition of all of the shares in a2MC."
Now whether that actually eventuates is another question.

If Freedom is involved and they already own 20% of the company, they will have to bid for at least 51% of the company. That would be a partial takeover offer. However they could make a full takeover offer and kneecap it by offering a derisory price which many investors would not accept. That way they would not have to stump up the cash for a full takeover of ATM, yet could still take control by taking out those investors that did sell out.

SNOOPY

[nextbigthing]

I could show an expression of interest in a beautiful women.....she may not be so keen on what I have to offer.

haha

https://www.youtube.com/watch?v=0iyeUcFKRv4

[nextbigthing]

lol.......are you any closer to that yacht yet

Yes thanks to this week! However I wouldn't go buying a new pair of boat shoes just yet. Give me a little longer

[robbo24]

Ah, sorry - badly worded. I will fix.

"No its very clear that they intend to make a full takeover offer. "an expression of interest from two parties with respect to an acquisition of all of the shares in a2MC."
Now whether theyactually make it is another question."

Better?

Indeed.

Although it's an interesting process being followed here.

Section 41 of the Takeovers Code prescribes a process that much be followed. A notice of intention to make an offer must be accompanied by documentation set out in Schedule 1 of the Code. This must be disclosed. A formal full or partial offer follows later.

What we have here looks like something else. The Takeovers Code cannot be contracted out of. The Takeovers Act also includes an offence of the usual misleading/market manipulation but extends it to "any transaction or event regulated by the takeovers code or incidental or preliminary to a transaction or event that is or is likely to be regulated by the takeovers code..." But how is anyone meant to know the non-binding expression of interest (seemingly preliminary to a notice of intention to make an offer) is not misleading if it is confidential?

My question is this - is there other examples of a completely qualifified, confidential (keeping in mind the Code cannot be contracted out of) conditional (etc etc) expression of interest for a takeover? Is this really normal and on what basis? If not, why are they exempt from following the normal process just because they say it's non-binding?

I would expect a justifiable price rise on the basis of an s 41 notice with all the trimmings, but not this

[robbo24]

FIN.NZX started with an annoucement without much detail...

Followed over a month later with an s 41 notice...

Although I think to some extent you can distinguish between the airey, thinly detailed announcement of FIN and ATM to some extent... Something to ponder...

The only certain thing is that nothing is certain

[Lola]

Indeed.

Although it's an interesting process being followed here.

Section 41 of the Takeovers Code prescribes a process that much be followed. A notice of intention to make an offer must be accompanied by documentation set out in Schedule 1 of the Code. This must be disclosed. A formal full or partial offer follows later.

What we have here looks like something else. The Takeovers Code cannot be contracted out of. The Takeovers Act also includes an offence of the usual misleading/market manipulation but extends it to "any transaction or event regulated by the takeovers code or incidental or preliminary to a transaction or event that is or is likely to be regulated by the takeovers code..." But how is anyone meant to know the non-binding expression of interest (seemingly preliminary to a notice of intention to make an offer) is not misleading if it is confidential?

My question is this - is there other examples of a completely qualifified, confidential (keeping in mind the Code cannot be contracted out of) conditional (etc etc) expression of interest for a takeover? Is this really normal and on what basis? If not, why are they exempt from following the normal process just because they say it's non-binding?

I would expect a justifiable price rise on the basis of an s 41 notice with all the trimmings, but not this

I was wondering when someone would ask this. I cannot recall ever another example of such a wishy washy announcement. Its a shambles. Where is the NZX here?? People are trading away in the dark. At the very least there should be a please explain or alternatively the stock should be in a trading halt.

[drcjp]

Indeed.

Although it's an interesting process being followed here.

Section 41 of the Takeovers Code prescribes a process that much be followed. A notice of intention to make an offer must be accompanied by documentation set out in Schedule 1 of the Code. This must be disclosed. A formal full or partial offer follows later.

What we have here looks like something else. The Takeovers Code cannot be contracted out of. The Takeovers Act also includes an offence of the usual misleading/market manipulation but extends it to "any transaction or event regulated by the takeovers code or incidental or preliminary to a transaction or event that is or is likely to be regulated by the takeovers code..." But how is anyone meant to know the non-binding expression of interest (seemingly preliminary to a notice of intention to make an offer) is not misleading if it is confidential?

My question is this - is there other examples of a completely qualifified, confidential (keeping in mind the Code cannot be contracted out of) conditional (etc etc) expression of interest for a takeover? Is this really normal and on what basis? If not, why are they exempt from following the normal process just because they say it's non-binding?

I would expect a justifiable price rise on the basis of an s 41 notice with all the trimmings, but not this

Interesting, which kind of makes me firm up a bit more on this being a real attempt. The Perich, FF and Dean foods teams MUST know that flying close to the wind like this and markedly affecting a SP could get them some pretty hefty "please explain" notices that won't be delivered in a nice fashion. Why would they bother for that grief just to take a look and say "yeah nah"?

[Harrie]

My question is this - is there other examples of a completely qualifified, confidential (keeping in mind the Code cannot be contracted out of) conditional (etc etc) expression of interest for a takeover? Is this really normal and on what basis? If not, why are they exempt from following the normal process just because they say it's non-binding?


Who is saying that they are exempt from following normal processes because the proposal is non binding Robbo?
How could an expression of interest not be deemed to be an intention under S41 of the take over code?

Its a bit like saying to your date "how would you react if I proposed that we slept together tonight". You could say that the intention was that you really did want to sleep with your date but wanted to gauge the reaction first. So its a bit hard to say that a proposal is not an intention otherwise why submit it!

I suspect because of the relationship between the parties that the expression of interest was a feeler as to gauging the reaction of a2mc to a full takeover.
In this case a2mc would have been in breach of the TO code if the expression was not tabled to the market