The Panel has received an application from Health Communication Network Ltd (HCN) dated 16 November 2004 alleging unacceptable circumstances in relation to a proposed takeover bid by IBA Health Ltd (IBA).
IBA announced its intention to make a takeover bid for all the ordinary shares in HCN on 3 November 2004. That announcement indicated that the proposed offer was subject to several conditions, including a condition that between the announcement date and the date of the offer (inclusive), IBA shares not trade below $0.70 on ASX at any time on any ASX trading day (IBA Price Condition).
IBA made a subsequent announcement on 15 November 2004 advising that on 11 and 12 November 2004, a number of IBA share trades took place at $0.69. IBA’s announcement went on to say that:
IBA is not obliged, at this time, to decide and IBA has not decided whether it will rely on the breach of the condition.IBA will make this decision before making any offer, when the precise number of shares that IBA would be obliged to issue pursuant to the takeover offer is known. IBA expects to lodge its bidder’s statement by the end of November 2004.
HCN’s application submits that unacceptable circumstances exist because:
- the breach of the IBA Price Condition has the effect of giving IBA an option whether or not to proceed with its announced bid; and
- IBA’s refusal to tell the market “in a timely manner” whether or not it intends to rely on the breached condition detracts from an efficient, competitive and informed market for HCN shares.
HCN has sought a declaration of unacceptable circumstances and final orders that IBA decide immediately whether it intends to rely on or waive the breach of the IBA Price Condition and make a public announcement regarding its decision.
The Panel has not decided whether to conduct proceedings in relation to HCN’s application and makes no comment on the merits of the application. The President of the Panel is appointing a sitting Panel to consider the application.
Director, Takeovers Panel
Level 47, 80 Collins Street
Melbourne, VIC 3000
Ph: +61 3 9655 3501