A Federal Court decision on 23 October 2008 confirms that ‘final’ means ‘final‘ in takeovers.
The decision follows an appeal by Cemex in relation to its $17 billion bid for Rinker last year.*
During the bid period, Cemex declared its US$15.85 price its ‘best and final offer, in the absence of a superior proposal’. Just under a month later, Cemex allowed Rinker shareholders to retain a A$0.25 final dividend, in effect increasing the bid consideration by A$0.25.
ASIC later made an application to the Takeovers Panel, alleging that Cemex had breached ASIC’s truth in takeovers policy in allowing Rinker shareholders to keep the dividend.
The Takeovers Panel made a declaration of unacceptable circumstances and ordered that Cemex pay A$0.25 to all shareholders who sold Rinker shares during the month of trading after the ‘best and final’ announcement. The Takeovers Panel’s decision was upheld in an appeal to the Review Panel and now again by the Federal Court.
The Federal Court decision confirms that the truth in takeovers rule has real teeth and the risk of serious consequences for departing from the ASIC policy.
*Freehills acted for Rinker on the takeover.
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