ASIC intervenes in Finders takeover

The corporate watchdog has submitted an application to the Takeovers Panel asking it to block certain shareholders of Finders Resources from accepting an offer for their shares.

The Australian Securities and Investment Commission has highlighted concern that Taurus Funds Management, which had an 11.3 per cent stake in Finders, and the independent directors (0.8 per cent) sold their interest in the company after announcing in December their intention to reject the takeover offer.

Eastern Field Developments made its 23 cents per share offer in October, which the board of Finders had rejected until recently, citing a report by independent expert Deloitte valuing the company’s shares between 31 and 35 cents each.

Asic has submitted that Taurus and the two independent directors created unacceptable circumstances by subsequently accepting the offer on March 19, and is seeking final orders to cancel their acceptances.

The commission is also seeking that withdrawal rights be offered to Finders shareholders that accepted the takeover offer on or after March 20, and that Eastern Field not take into account voting power in shares sold in that period.

“Asic submits that the effects of the circumstances include that investors in Finders have potentially suffered losses in connection with trading Finders shares in reliance on the statements and acceptances of Eastern Field’s bid have potentially occurred in circumstances in which they would not have if the departure from the ‘last and final statements’ had not happened,” the Takeovers Panel said in a statement.

According to the latest ASX update from Finders, Eastern Field has now acquired a 91.2 per cent stake in the company, including the disputed shares held by Taurus and the independent directors.

Eastern Field Developments director David Fowler said the group supports Asic’s position.

“We acknowledge that Asic is taking Taurus and the Finders directors to the Takeovers Panel to seek orders regarding their acceptance for their shares of the Eastern Field takeover offer,” he said

“We will be cooperating fully with any requests for submissions or input from the Takeovers Panel.”

In a statement to the ASX, Finders said that shareholders should accept the offer to avoid the risks of becoming a minority shareholder.

Shares in Finders dropped nearly 20 per cent today to finish at 17 cents each.