Panel Allows Dispatch of Smorgon Bidder's Statement With Additional Information

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The Takeovers Panel today announced that it currently does not intend to make a declaration of unacceptable circumstances in relation to the bid by Smorgon Distribution Ltd (Smorgon) for all of the ordinary shares in Email Ltd (Email). The Panel said that its final decision is waiting on the release of two supplementary information documents by Smorgon. The first will be sent with Smorgon's bidder's statement, the second will be sent after release of Email's half yearly report. The Panel also ordered that Smorgon was now free to send out its bidder's statement and offers.

The Panel's decision was due in part to the additional information which Smorgon has offered to send to Email shareholders in response to the Panel's earlier concerns about the adequacy of the information provided to Email shareholders.

The President of the sitting Panel, Dr Annabelle Bennett SC, said that the Panel had considered Email's concerns that the value of the CAPS securities being offered by Smorgon is less than $1.04. Dr Bennett said that the Panel members had considered the submissions of all parties, and had taken independent advice from Grant Samuel and Associates on the valuation of the CAPS by SG Hambros. The Panel was not convinced that the CAPS should be valued at less than $1.04 each.

The initial additional information that the Panel had required from Smorgon included:

  • Disclosure of some of the risks of CAPS as securities; and
  • Reference to the differing legal views on the legal means Smorgon might need to go through to achieve the "spin off" Email's major appliances division.

The later information will include:

  • Financial information on the Smorgon Steel Group and the effects on the group's financial statements in the event of consolidating Email, and Smorgon being required to continue the dividend payments for the CAPS securities; and
  • Financial information on Smorgon Distribution Ltd, as payer of the dividends to CAPS holders.

The Panel's order permitting dispatch of the bidder's statement, was made following the order of the Review Panel restraining dispatch.

Nigel Morris
Director, Corporations and Securities Panel
Level 47 Nauru House
80 Collins Street
(03) 9655 3501