http://www.takeovers.gov.au/content/DisplayDoc.aspx?doc=guidance_...

http://www.takeovers.gov.au/content/DisplayDoc.aspx?doc=guidance_notes/current/006.htm&pageID=&Year=

"Corporations Act s621(3) requires that the consideration offered under a takeover bid equal or exceed the maximum consideration that the bidder or an associate provided or agreed to provide under any purchase or agreement within the four months before the date of the bid. It applies to both cash and non-cash consideration and is a fundamental provision giving effect to the principle set out in paragraph 602(c) that shareholders all have a reasonable and equal opportunity to participate in bid benefits."

In my humble opinion, AWE cannot buy ADI share for a price exceeding 40 cents, nor can it engage in any transaction involving other persons to circumvent the rule. There cannot be any concert party buying shares on behalf of AWE.

The only way that AWE can pay more is to raise the offer price.

It is possible (just a guess/speculation) that AWE was advised by its broker to pitch deliberately low so as to avoid picking up shares at a price materially less than fair value.

That might sound daft but AWE may be in possession of information known to ADI directors but not in the public domain (yet). It had to start the ball rolling, which it did, but it might have been in an embarrassing position had it offered more (but less than fair value) and picked up shares whilst being in possession of price sensitive information.

The bid was pitched at less than Hartleys' short-term price target published in March. There has to be some rational explanation for that. But, it's all guesswork.