Review Application Received National Can Industries Limited

TP03/103

The Panel advises that yesterday it received an application for review of the Panel's decision in relation to the affairs of National Can Industries Limited (NCI).

The application from Visy Industrial Packaging Holdings Pty Ltd (VIPH) seeks a review of the decision of the Sitting Panel to accept the following undertakings provided by NCI and ESK Holdings Pty (ESK):

  1. that ESK would increase the consideration payable under the current scheme of arrangement (Current Scheme) to give effect to the ESK proposal by 1.5 cents/share;

  2. that ESK would repay the break fee (First Break Fee) paid by NCI if a higher rival bid is announced before the Current Scheme meeting and is eventually successful; and

  3. that NCI would not pay ESK the second break fee and that ESK would not enforce its right to receive payment of all or any part of the second break fee from NCI.

In its application for review VIPH submits that:

  1. the failure by ESK to circulate a letter setting out its proposed undertakings to all parties (including VIPH) in the timeframe specified by the Panel, meant that it was not afforded a proper opportunity to respond and thus has been materially prejudiced and denied natural justice.

  2. the undertakings provided by ESK and NCI do not remedy any of the unacceptable effects that the Panel considered had arisen with respect to the payment of the First Break Fee, including its effect on the operation of an efficient, competitive and informed market for shares in NCI and generally.

  3. ESK cannot claim that it would be materially prejudiced by initial undertakings suggested by the Panel, including ratification of the payment of the First Break Fee by the minority NCI shareholders and if not repayment of the fee, on the basis that in an implementation agreement ESK had agreed that if the Panel or a court finally determined that the First Break Fee constitutes unacceptable circumstances, ESK would refund that amount.

The Panel has not yet sought the views of other persons potentially involved in the review application and has therefore formed no views on the application.

The President of the Panel has yet to appoint a sitting Panel to consider the review application.

George Durbridge,
Director, Takeovers Panel
Level 47 Nauru House,
80 Collins Street, Melbourne VIC 3000
Ph: +61 3 9655 3553 Fax: +61 3 9655 3511

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