The Panel has today published the reasons for its decision in the Selwyn Mines Limited (Receivers and Managers Appointed) (SLN) proceedings. The proceedings arose from an application made on 9 September 2003 (Application) by Hillgrove Gold Limited (HGO).
On 6 September 2003, HGO and Grange Resources Limited (GRR) announced their intention to make an off-market scrip bid for all of the fully paid ordinary shares in SLN (Bid).
In its application to the panel HGO alleged unacceptable circumstances in relation to the failure of the Receivers and Managers (Receivers) of SLN to provide information (Relevant Information) to the directors of SLN in order to enable them to understand the legal status of negotiations between the Receivers and a third party purchaser (Ivanhoe Mines Limited and Mineral Resources Limited) of SLN's assets.
HGO sought an order that the Receivers provide the Relevant Information to the directors of SLN. However, the Panel considered that with no bidder's statement lodged by HGO and GRR at the time of the Application and thus no target's statement due for some weeks, it would have been premature to declare that unacceptable circumstances existed at the time of their decision because information which may have been required to be included in the target's statement some weeks later was not made available to the directors of SLN by the Receivers at the earlier time.
The Panel considered that when and if the directors of SLN have a present need for information regarding the status of the sale of the assets by the Receivers in order to prepare a target's statement and make their formal recommendation to the shareholders of SLN concerning the actual bid, the situation may be different.
HGO also sought an order restraining the Receivers from completing the sale of the assets to the third party. With respect to this request, the Panel decided that no basis had been, or could be, established to restrain the sale of the assets due to the possibility of the Bid being made, because the sale was in the ordinary course of a receivership of which HGO and GRR were aware when they announced their Bid and it was not frustrating action to forestall the Bid.
The Panel concluded that based on the information before it, it was unable to declare that unacceptable circumstances had arisen and accordingly declined to conduct proceedings.
Subsequent to the Panel's decision, on 10 October 2003, HGO and Grange announced that they would not be proceeding with the Bid for SLN due to an announcement by Ivanhoe that its newly formed subsidiary had purchased all of the SLN copper-gold project's mining and exploration leases in Australia. In light of this, HGO and GRR announced that it is no longer reasonable to expect them to proceed with the Bid as conditions of the Bid could not be satisfied.
The Panel has posted its full reasons for this decision on its website.
The sitting Panel was Ian Ramsay (sitting President), Michael Ashforth (sitting Deputy President) and Celia Searle.
Director, Takeovers Panel
Level 47 Nauru House,
80 Collins Street, Melbourne VIC 3000
Ph: +61 3 9655 3553 Fax: +61 3 9655 3511