Panel Publishes Reasons in Broncos 03 and 04

Release number


The Panel advises that it has published its reasons in Broncos 03 and 04.

In Broncos 03, the Panel accepted undertakings from Magic Millions in relation to its application under section 657EA requesting a review of the decisions in the Broncos Nos. 1 and 2 proceedings. That followed lengthy consultation with the parties in the contested takeover, and a further application to the Panel.

Magic Millions undertook to make offers to Broncos shareholders for all of their shares at a bid price of 18 cents. The bid was conditional on Magic Millions acquiring more than 45% of the shares in Broncos and having a greater voting power in Broncos shares than News Corporation and its associates at the close of Magic Millions' bid. That bid was not successful.

The Broncos 03 Panel considered that the proposed offer by Magic Millions was on sufficiently better terms than the first Magic Millions bid, that it was reasonable to allow it to be subject to the minimum acceptance condition.

In Broncos 04 the Panel granted Magic Millions a modification to section 652B allowing Magic Millions to withdraw its revised bid if another person gained control over more than 50% of Broncos shares during the Magic Millions bid period. The Panel granted the modification after ASIC declined to do so. Broncos shareholders decided to accept for sufficient numbers of their shares into the bid by BB Sports Pty Ltd, which had been revised up to 18 cents per share in response to the revised bid by Magic Millions, to trigger the condition.

The purpose of the withdrawal modification was to protect Broncos shareholders who would prefer to receive 18 cents for 100% of their shares, by allowing them to accept the Magic Millions bid while still having an opportunity to accept the BB Sports bid announced on 22 January, if it turned out to be successful.

The sitting Panel in this review application was Simon McKeon (sitting President), Ian Ramsay and Carol Buys.

The reasons are available on the Panel's website.

Nigel Morris
Takeovers Panel
Ph: +61 3 9655 3501