The Takeovers Panel advises that yesterday evening it declined an application from Troy Resources in relation to the issue of up to 25 million shares in Taipan Resources approved at the Taipan AGM on 30 November. Troy applied on 29 November.
Troy had sought an interim order restraining the issue of the shares, pending the decision of the Panel on Troy's application for a declaration of unacceptable circumstances. Troy asserted that the issue of shares, at this time, would, in the absence of other strong reasons, be for the purpose of impeding Troy's takeover.
The Panel is satisfied that Taipan has an urgent need for funds to cover expenses relating to the proposed merger with St Barbara Mines and the takeover by Troy as well as on-going operational and administrative expenses. The Panel considers that a placement of 25 million shares by Taipan in accordance with the law and the ASX Listing Rules will not amount to unacceptable circumstances merely because Taipan is the target of a takeover bid.
However, the Panel notes that unacceptable circumstances could arise in certain situations, particularly if shares were issued to parties involved in the St Barbara merger or their associates. If this occurred, the Panel would be willing to consider a further application in relation to those circumstances.
Taipan has agreed to issue 15 million shares to two stockbroking firms, who will place the shares with their private clients. The Panel understands that Taipan has no knowledge of the identity of these clients. However, the Panel would expect Taipan to disclose to the market the identity of the stockbroking firms and the capacity in which they are acting when Taipan announces the placement itself.
In making its decision, the Panel has also taken into account the alternative funding offered by Westchester Financial Services in its letter to Taipan dated 11 December 2000. However, the decision whether or not to accept this offer in preference to a placement of shares is a business judgment by Taipan directors and is not a matter in which the Panel considers it appropriate to intervene on present information.
The sitting Panel is Simon McKeon , Professor Ian Ramsay and Denis Byrne.
Director, Corporations and Securities Panel
Level 47 Nauru House, 80 Collins Street, Melbourne
Ph: +61 3 9655 3501