Goodman Fielder 01 - Panel Accepts Undertaking from Burns Philp in Declining Goodman Fielder Application

Release number


The Panel advises that it has accepted undertakings from BPC1 Pty Ltd. (Burns Philp) (a subsidiary of Burns, Philp & Company Ltd) in relation to Burns Philp's takeover bid for Goodman Fielder Ltd. (Goodman Fielder).

On the basis of the undertakings from Burns Philp, the Panel has declined the application from Goodman Fielder in relation to the proposed takeover bid for Goodman Fielder by Burns Philp, which the Panel received on 30 December 2002. The Panel had previously decided not to make any interim order restraining the dispatch of Burns Philp's bidder's statement.

The application sought a declaration of unacceptable circumstances, interim orders restraining the dispatch of the Burns Philp bidder's statement until the Panel had finally determined the application, and final orders in relation to various conditions proposed to be in the Burns Philp bid.

Goodman Fielder sought the deletion, or amendment, of three of the conditions Burns Philp had proposed for its bid, in relation to: Burns Philp's financing for its bid, advice from the Goodman Fielder board concerning Goodman Fielder's earnings and liabilities, and material adverse changes in relation to Burns, Philp & Company Ltd (and its subsidiaries). Goodman Fielder also requested that Burns Philp disclose that it cannot waive the 90% minimum acceptance condition for its proposed bid without its financiers' consent.

The undertakings primarily relate to Burns Philp varying its bid to grant a withdrawal right (Withdrawal Facility) to Goodman Fielder shareholders who accept its bid prior to the time when Burns Philp has settled, documented and signed the terms of the financing for the various loans (Facilities) it requires to finance its bid. Goodman Fielder shareholders will initially receive a supplementary bidder's statement setting out the changes to Burns Philp's bid, and describing the Withdrawal Facility which will commence from that time.

When Burns Philp has settled and signed the Facilities documentation Goodman Fielder shareholders will receive a further supplementary bidder's statement which will contain a withdrawal form. Shareholders who have accepted at that stage may, if they wish to, withdraw their acceptance up to 10 days from the date of the supplementary bidder's statement, when the Withdrawal Facility will lapse. The Withdrawal Facility will also lapse (without notice) if Burns Philp declares its bid to be free from the defeating condition in its bid that the Facilities be available to it (the Finance Condition).

Burns Philp has also undertaken to waive two defeating conditions in its bid, those relating to material adverse changes in the operation of the business of Burns Philp or its related companies, and adverse changes in financial markets. The Facilities however, still remain subject to similar conditions, but the decision on whether or not to rely on them will be up to the financiers to Burns Philp's bid rather than Burns Philp itself.

Burns Philp has also undertaken to vary the terms of the defeating condition in its bid relating to the Facilities to exclude from the Finance Condition any precondition or event of default that the financiers to the bid have agreed to waive. The undertaking reduces concerns that the Finance Condition may have offended the principle that a bidder should not be able to frustrate its own bid, but may only rely on conditions which are outside its sole control.

Burns Philp has also undertaken to give a statement to Goodman Fielder shareholders which will assist them in assessing the likelihood of the Facilities being available to Burns Philp to fund its bid.

Burns Philp has already addressed the concerns raised by Goodman Fielder concerns about disclosure concerning its ability to waive the 90% minimum acceptance conditions in its bid. Burns Philp included some additional disclosure in the Chairman's letter which accompanied Burns Philp's bidder's statement, and then formally repeated that disclosure in a supplementary bidder's statement.

The Panel did not require any undertakings in relation to the "Accounting Conditions" in paragraphs 9.6(g) and (h) of the Burns Philp bidder's statement.

The terms of the undertaking are attached as Annexure A to this Media Release.

The Panel will post the reasons for its decision on its website when they are finalised, at .

The President of the Panel appointed Ilana Atlas, Michael Tilley and Marian Micalizzi to be the Sitting Panel to consider the application.

Nigel Morris
Director, Takeovers Panel
Level 47 Nauru House
80 Collins Street
Melbourne VIC 3000
Ph: +61 3 9655 3501

Undertaking Provided by Burns Philp

Following is the text of the undertaking accepted by the Takeovers Panel.


The undertaking set out below relates to the off-market takeover bid by BPC1 Pty Limited ABN 45 101 665 918 (Burns Philp) for all the issued ordinary shares in Goodman Fielder Ltd ABN 44 000 003 958 (Goodman Fielder) in respect of which a bidder's statement, containing an offer (Offer), was lodged with the Australian Securities and Investments Commission (ASIC) on 19 December 2002 (Bidder's Statement).


Pursuant to subsection 201A(1) of the Australian Securities and Investments Commission Act 2001 (Cth), Burns Philp undertakes to the Takeovers Panel that it will:

a. as soon as practical, free its Offer from conditions in clauses 9.6(k) and (l) (the Burns Philp Material Adverse Change Condition and Market Adverse Change Condition);

b. as soon as practical after obtaining any necessary relief from ASIC, vary its Offer to give Goodman Fielder shareholders who accept the Offer a withdrawal right (Withdrawal Facility) which extends from the date of the Offer until the time (Cut-Off Time) which is the earlier of:

(1) 7.00 p.m. (Sydney time) on the date which is 10 (ten) calendar days from the date of Burns Philp sending a supplementary bidder's statement to Goodman Fielder shareholders setting out the terms of the settled and signed finance facilities (Facilities) for Burns Philp's bid; and

(2) the time (if any) when Burns Philp declares its Offer free of the financing condition set out in clause 9.6(q) of the Offer (Finance Condition);

c. as soon as practical after obtaining any necessary relief from ASIC, vary the Finance Condition to exclude from the operation of the condition preconditions and events of default to the Facilities which the underwriters to the Facilities have agreed to waive;

d. as soon as practicable after the resolution of these proceedings, and receiving any necessary relief from ASIC, send a supplementary bidder's statement (Variation Supplementary Bidder's Statement) to each Goodman Fielder shareholder, along with the notice of variation to its Offer:

i. giving a plain English description of the Withdrawal Facility;

ii. advising that a form (Withdrawal Form) to exercise the Withdrawal Facility will be sent with a supplementary bidder's statement announcing the date for closing of the Withdrawal Facility (Cut-Off Supplementary Bidder's Statement);

iii. offering Goodman Fielder shareholders phone, fax and email addresses to which they can send a request to Burns Philp to be sent a Withdrawal Form before the Cut-Off Supplementary Bidder's Statement is issued;

iv. advising that (1) the Cut-Off Supplementary Bidder's Statement may not be issued, and the Withdrawal Facility will lapse, when and, if Burns Philp declares the Offer free from the Finance Condition before the Cut-Off Supplementary Bidder's Statement is issued, and (2) the Withdrawal Facility will otherwise lapse at the Cut-Off Time;

e. after the settling and the signing of the documentation for all of the Facilities listed in Annexure E to the Burns Philp bidder's statement, send a copy of the Cut-Off Supplementary Bidder's Statement to each Goodman Fielder shareholder:

i. setting out (in similar style and detail to the description of the terms of Term Loan A in Part 1 of Annexure E of the Burns Philp bidder's statement) the events of default and preconditions to each of the Facilities (any pre-condition which is common to a number of different Facilities will be identified in relation to each Facility, but not necessarily repeated in full in relation to each Facility);

ii. clearly setting out the preconditions to drawdown of the Facilities, and to the Finance Condition, which remain to be satisfied at the date of the Cut-Off Supplementary Bidder's Statement;

iii. advising of the status of those events of default and preconditions (to the best, current knowledge of Burns Philp);

iv. containing a Withdrawal Form;

v. explaining the Withdrawal Facility i.e. that any Goodman Fielder shareholder who had accepted the Offer may withdraw that acceptance by giving written notice on the Withdrawal Form to Burns Philp no later than the Cut-Off Time;

vi. explaining that acceptances made after the Cut-Off Time, and acceptances made prior to the Cut-Off Time and not withdrawn before the Cut-Off Time, will not be able to be withdrawn under the Withdrawal Facility;

vii. explaining that the Withdrawal Facility will, however, lapse immediately if the Offer is declared free of the Finance Condition;

viii. explaining that (subject to relief from ASIC) section 653B of the Corporations Act has been modified to allow a person who has previously exercised their right under the Withdrawal Facility to accept the Offer again after the closure of the Withdrawal Facility for the same shares;

f. include in the Variation Supplementary Bidder's Statement a statement indicating that:

i. in relation to any conditions to the Facilities which depend on an act of Burns Philp - Burns Philp's intention is to comply with the preconditions;

ii. in relation to any conditions to the Facilities which relate to the business, assets, operations, financial condition or prospects of Burns, Philp & Company Limited (and its subsidiaries) - whether, in Burns Philp's view, it is likely that any such condition will be triggered during the offer period given the nature of its business, the products sold, its customer base and the geographic spread of its operations; and

iii in relation to any conditions to the Facilities which relate to a material adverse change in the financial markets - without engaging in speculation (such as in relation to matters like a possible war in Iraq, the status of the US economy and any other matters), whether Burns Philp has any reason to expect that a material adverse change will occur; and

g. use its best endeavours to gain the appropriate relief from ASIC.

Dated: 9 January 2003

Signed for and on behalf of BPC1 Pty Limited

T Degnan, Director