Ann: Revised Nyrstar Proposal , page-12

Takeover offer is not normally binding until several conditions are satisfied including a due diligence. Even when the due diligence has been satisfactorily completed it will be subject to regulatory approvals and a certain percentage of shareholders accepting the offer. The key thing is what the directors recommend to shareholders and whether Toho makes a counter-offer. Takeover offer from Nystar would also be subject to FIRB approval. Technically, Toho never proposed to take over the company so it would be interesting to see how it plays out. While one of the transactions proposed by Toho was a capital raising to Toho at a price of 20c, this was not an offer to shareholders to acquire their shares at 20c each. So shareholders were not getting value of 20c for their shares, that is my interpretation. Admittedly, Nystar's offer reflects a much clearer valuation of CBH shares.

Under a scheme of arrangement, at least 75% of the shareholders should approve the acquisition at a general meeting of the company. Toho owns 23% of the company. Toho can make it very difficult for the scheme of arrangement to proceed even if the directors approve it.

Also the acquisition by Nystar is subject to Nystar acquiring 100% of CBH's convertible notes at no more than 75% of their face value. Toho holds about 50% of CBH's convertible notes. This could represent another stumbling block for the acquisition even if the remaining 77% of shareholders excluding Toho approve the acquisition by Nystar.

Given the importance of Toho's participation in the proposed transaction, I would think Nystar would also have sounded out or may sound out Toho's take on the transaction.

While Toho may be capable of blocking this acquisition by Nystar, I believe they will significantly need to improve their proposed transactions with CBH to ensure that these are approved at the EGM by other shareholders.

In conclusion, I think an improved offer will come from Toho. Possibly early next week when the directors of CBH have indicated that they will provide a response to the Nystar proposal.