Outsider bid to resolve Flinders impasse
19th Jun 2012
JUNE 19 – The troubles afflicting Russian iron and steel giant Magnitogorsk Iron and Steel Works OJSC and its Australian iron ore miner takeover target Flinders Mines began with a court move by a single Magnitogorsk shareholder.
Now a Flinders shareholder has lodged an application with the Australian Takeovers Panel that may help to get the impasse sorted ... or may just make things more complicated.
The $A554M takeover by Magnitogorsk, which offered 30c for each Flinders share, was heading for an orderly conclusion last month after Flinders shareholders had voted in favour of the scheme of arrangement in March.
Then a minority Magnitogorfsk shareholder identified as Elena Egorova lodged a claim in the Arbitration Court in the small industrial city of Chelyabinsk that the takeover of Flinders would disadvantage ordinary shareholders.
The court approved her application for an injunction that prevents the Magnitogorsk board from implementing the scheme of arrangement.
The hearing of appeals by Magnitogorsk and Flinders against the injunction has been adjourned to early July, after the June 30 deadline for implementation of the scheme of arrangement.
Without a decision by both companies to extend the deadline or some other intervention, the deal would fail.
Now a New South Wales shareholder in Flinders, Geraldine Carter, has asked the Takeover Panel – a government body set up under the Australian Securities and Investment Commission Act primarily to resolve disputes over takeovers – to step in.
Arguing that Ms Egorova’s injunction threatens to prevent the takeover transaction and affect the rights of Flinders shareholders, Ms Carter has asked the panel for an order to extend the scheme or arrangement quit date.
She also asks for orders from the panel directing Flinders and Magnitogorsk to obtain further court hearings and complete the acquisition as soon as practicable.
The Takeover Panel says it has not yet decided if the application will be accepted for a hearing.
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