So, in their next annual meeting in November, they are going to vote on, well they want to amend a section that allows for receiving a take over bid that would expire in 3 years. I don't think they would add this just for fun. I don't know the laws in Australia, but I remember that Chinalco Rio deal falling thru because shareholders didn't want the Chinese to control Rio. Are foreign companies allow to invest directly, or thru a vechicle company? If you read the following it allows for BGD to vote on wether or not to accept take over bid and negotiate a better price. Or is this rather a measure to protect themselves down the line so as to not be bought out by their much more wealthy Saudi partner? And if they are, for the right price. Because it does go on to stimpulate "advantages" for officers on the company. Although to be honest, I didn't read that part enough. Here is the section of the announcment...
"The New Constitution contains proportional takeover approval provisions Under section 648G of the Corporations Act, a company may include in its constitution a provision whereby a proportional takeover bid for shares in the company may only proceed after the bid has been approved by a meeting of members held in accordance with the legislation. The provision for “Approval of Proportional Takeover Bids” is contained in rule 14 of the New Constitution. The Corporations Act requires that the following information be provided to members when they are considering the inclusion of proportional takeover approval provisions in a constitution. (a) What is a proportional takeover bid, and why do we need the proportional takeover approval provisions? A proportional takeover bid involves the bidder offering to acquire the same percentage of every target member’s shares. This means that control of the Company may pass without members having the chance to sell all their shares to the bidder. The bidder may take control of the Company without paying an adequate amount for gaining control. In order to deal with this possibility, the Company may provide in its constitution that: in the event of a proportional takeover bid being made for shares in the Company, members must vote by ordinary resolution on whether to accept or reject the proportional takeover bid; the majority decision will be binding on all the members. The Directors consider that members should be able to vote on whether a proportional takeover bid ought to proceed given such a bid might otherwise allow control of the Company to change without members being given the opportunity to dispose of all of their shares for a satisfactory control premium. The Directors also believe that the right to vote on a proportional takeover bid may avoid members feeling pressure to accept the bid even if they do not want it to succeed. (b) What is the effect of the proportional takeover approval provisions? A transfer giving effect to acceptance of an offer under a proportional takeover bid must not be registered unless and until a “Prescribed Resolution” to approve the proportional takeover bid has been passed or taken to have been passed. If a proportional takeover bid is received, the Directors must convene a meeting of the Company to vote on a resolution to approve the proportional takeover bid (the “Prescribed Resolution”). The meeting must be held, and the resolution voted on, prior to 14 days before the end of the period during which the offers under the proportional takeover bid remain open. For the resolution to be approved, it must be passed by a majority of votes at the meeting, excluding votes of the bidder and its associates. If the resolution is rejected, the registration of any transfer of shares resulting from the proportional takeover bid will be prohibited and the bid is deemed by the Corporations Act to have been withdrawn. If the resolution is approved, the relevant transfers of shares will be registered, provided they comply with the other provisions of the constitution. If a meeting is not held, a resolution approving the proportional takeover bid will be deemed under the Corporations Act to have been passed, allowing the proportional takeover bid to proceed. 8 Please note that the proportional takeover provisions in the New Constitution do not apply to a full takeover bid and will expire three years after adoption in accordance with section 648G(1) unless renewed by a further special resolution. (c) Potential advantages and disadvantages for the Directors and members While the proposed proportional takeover approval provisions will allow the directors to ascertain the views of the members on any proportional takeover bid, the provisions do not otherwise offer any advantage or disadvantage to the directors who remain free to make their own recommendations as to whether the bid should be accepted. It is a potential advantage to all members that they have the opportunity to consider and vote upon any proposed proportional takeover bid. For a proportional takeover bid to be approved, it must be approved by more than half of the shares voted at the meeting and accordingly, the proportional takeover approval provisions are likely to cause an intending offeror to structure its offer in such a manner as to make it attractive to a majority of members. It may also be argued that the proportional takeover approval provisions will discourage proportional bids and reduces the possibility of a successful proportional takeover bid. This may in turn reduce the opportunities which members may have to sell some of their shares at an attractive price to persons seeking control of the Company. (d) Conclusion The Board considers that the potential advantages for members of the proportional takeover approval provisions outweigh the potential disadvantages, and that the inclusion of the proportional takeover approval provisions in rule 14 of the New Constitution is in the best interests of the members of the Company for the abovementioned reasons. As at the date on which this statement was prepared, no Director is aware of any proposal by any person to acquire, or to increase the extent of, a substantial interest in the Company. The Board recommends that members vote in favour of the special resolution to adopt the New Constitution."
BGD Price at posting:
15.5¢ Sentiment: ST Buy Disclosure: Held
