aitken exercises options, page-5

Enforcing truth in takeovers

Truth in takeovers is high profile and usually emotional for the parties involved. Can a bidder depart from its ‘last and final’ statement in the face of an unexpected rival? Will a shareholder be held to its statement of support for a particular transaction?

Perhaps there is an easy answer to the debate, which lies in the level of qualification. Takeover participants will not be held to a statement if it is sufficiently qualified. A statement without qualification should be very rare, but can be used strategically by a bidder, after having assessed the risk of rivals. Using qualifications effectively, bidders and shareholders can control their own destiny.