PERTH (miningweekly.com) – The Takeovers Panel said on Friday that ASX-listed Gondwana Resources had failed to give its shareholders all the relevant information regarding a takeover from Ochre Group.

In May this year, Ochre launched a takeover offer for Gondwana, offering shareholders 8.2c a share for all the outstanding shares.

However, in July, Gondwana announced a fully underwritten one-for-one nonrenounceable entitlement issue, priced at 3.2c a share, despite Ochre’s insistence that the rights issue should include one free option, exercisable at 5c a share, for every two shares offered, and that it should not be underwritten.

In its request to the Takeovers Panel, Ochre claimed that Gondwana’s notice of an annual general meeting, which was held on August 11, had contained information deficiencies and that the entitlement issue would trigger a condition of Ochre’s bid and was a frustrating action.

Furthermore, it was alleged that certain shareholders in Gondwana had contravened Section 606 of the Corporations Act.

It was alleged that shareholder Duncan Merrin, who has an 11.81% shareholding in Gondwana, had failed to disclose his shareholding in the company until July 9, and had then made incomplete disclosures until a substantial holder notice was lodged on July 30.

The Takeovers Panel stated on Friday that the circumstances around Gondwana’s behavior were unacceptable, saying the company’s shareholders had not been given enough information to enable a thorough understanding of the merits of the entitlement issued, compared with Ochre’s bid.

Furthermore, the Takeovers Panel noted that the entitlement issue constituted a frustrating action, but had not been subject to shareholder approval, and also that Gondwana’s shareholders and the market did not know the identify of a substantial shareholder.

The Takeovers Panel ordered Gondwana to make its entitlement offer subject to shareholder approval, and said that any issue of shares, options or convertible notes should also be subject to shareholder approval if it took place during Ochre’s bid.

Moreover, Gondwana’s shareholders were to receive disclosure in a form approved by the panel when seeking shareholder approval for these actions.

It was also ordered that if Ochre obtained a relevant interest of more than 50% in Gondwana, and the bid was declared unconditional, Merrin had to accept 6.81% of Gondwana shares into the bid, unless he had accepted a superior unconditional takeover offer, which had been recommended by the Gondwana board.

Earlier this week, Gondwana told its shareholders that it had received an indicative, nonbinding and conditional proposal from an unnamed source, for the outstanding shares in the company.

Gondwana said that the indicative proposal contemplated an offer that would be structured as a cash offer, with a script alternative. While the price per share had not yet been determined, the indicative proposal contemplated a floor price of 10c a share, which was more than that being offered by Ochre.

The indicative proposal was subject to due diligence and certain other conditions yet to be finalised.