Panel rules against Bullseye funding deal

The Takeovers Panel has declared unacceptable circumstances in relation to a proposed funding deal for unlisted public company Bullseye Mining.

Under the deal, Desmond Mullan, who is the father of Bullseye executive director Dariena Mullan, would raise up to £15 million ($27 million) via a convertible note issue, along with a $100 million gold prepayment deed.

Bullseye is currently the subject of a $4 million takeover bid from gold junior Red 5.

The panel has not made final orders, but said the proposal had the potential to confer voting power.

“The Mullan proposal effectively allows Mr Mullan, a related party, to determine who will receive notes that, upon conversion, may confer voting power of approximately 28 per cent or more in Bullseye,” the panel said.

“The terms of the notes also give Mr Mullan significant veto rights with only a holding of more than 20 per cent of the notes.

“The panel also considered certain terms of the notes may deter or block a potential control transaction, inhibit the acquisition of voting shares taking place in an efficient, competitive and informed market and have a coercive effect on shareholders if shareholder approval is required upon conversion of the notes.

“The effect on potential control of the terms of the notes and the veto rights, in combination, exceeded what in the panel’s experience would be usual in the circumstances, and there were no measures to disperse that effect.”

Bullseye's gold portfolio includes the Laverton Project, located 30 kilometres to the north of the Darlot gold mine.

It also has its Southern Cross and Aurora gold projects.