This is a service specifically targeted at the needs of busy non-executive Directors.  We aim to give you a “heads up” on the things that matter for NEDs in the week ahead – all in two minutes or less.

In this edition, we consider the upcoming deadlines for ASIC’s virtual meeting relief and the application received by the Takeovers Panel in relation to the affairs of Nex Metals Explorations Ltd.  

In Over the Horizon, we consider some recent action in the M&A space – but this time in the context of cold feet, pulled bids and non-eventuating proposals. 


ASIC relief for virtual-only meetings due to expire.  The ASIC Corporations (Virtual-only Meetings) Instrument 2022/129, which permits listed companies to hold virtual-only meetings, regardless of the provisions in their constitution, will expire tomorrow, 31 May 2022.  From Wednesday, 1 June 2022, listed companies will only be able to hold virtual meetings if its constitution expressly permits it, in accordance with section 249R of the Corporations Act 2001 (Cth).  The relief will continue for unlisted companies until 30 June 2022.  If you are unsure as to whether your company’s constitution permits virtual meetings, we can review and advise. 


Takeovers Panel receives application in relation to affairs of Nex Metals Explorations Ltd.  The Takeovers Panel has received another application from Nex Metals Explorations Ltd (Nex Metals) in relation to its own affairs.  Nex Metals is currently the subject of an off-market scrip takeover bid from Metalicity Ltd (Metalicity).  Nex Metals submits that there are new material circumstances which render Metalicity’s bidder’s statement released in September last year (and supplementary statements later lodged) potentially misleading or deceptive.  In particular, Nex Metals submits that the bidder’s statements should be revised because of a significant fall in the share prices of both Nex Metals and Metalicity, and the impact this has on the premiums communicated through those statements and because shareholders should be informed of Metalicity’s pro rata non-renounceable rights issue, which was announced after its bidder’s statement was issued.  This application may provide further insight on the Panel’s approach to disclosure of movements in share price over a bid period, albeit the approach followed by the bidder in this case seems entirely consistent with market practice.  See the Takeovers Panel’s media release.


M&A activity – an exercise of both push and pull.  As we expected, 2022 has so far been a year of heightened M&A activity, with several large transactions being announced, but also several falling foul of either bidder skittishness or target shareholder rebellion.  Of course, it should be no surprise that some M&A deals will fail, particularly given heightened volatility.  However, the abandoned approaches for Appen and Brambles were notable for their speed.  Less than 10 hours after Canadian company Telus International announced its unsolicited $1.2 billion non-binding indicative bid for Appen Limited, it took its proposal off the table, despite Appen making it clear that it was open to negotiate with Telus.  Brambles Limited released a response to media speculation on 16 May 2022, indicating that it has had preliminary engagement with CVC Capital Partners in regard to an unsolicited bid.  The following day, Brambles announced that CVC advised it would not put forward a proposal nor conduct due diligence at this time, flagging external market volatility as the reason.  In both instances, there was a near immediate reflection of shareholder disappointment in the share price for the would-be targets.  Both transactions serve as a reminder to Directors about the importance of confidentiality but also an effective “leak response”, which extends to communication with shareholders in the event of an unsuccessful or abandoned approach.

AGL and climate policy.  Anyone who doubted that climate change issues would play a more important role in business decision making need look no further than today’s termination of the proposed AGL demerger following shareholder dissent mobilized by major shareholder Mike Cannon-Brookes.  Attention will now turn to the outcome of a proposed strategic review into the company’s structure and operations.  Time will tell whether this transaction will provide a catalyst for other large carbon emitters to accelerate their decarbonization strategies.  Greater certainty over the direction of climate change policy under the new Labor government may well provide capital providers in the market with the impetus to fund more aggressive approaches.

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