RHG bidding duel goes to the Takeovers Panel
The Resimac syndicate that is bidding for RHG will try to block Cadence Capital, a member of the rival Pepper syndicate and also an RHG shareholder, from having a say in the outcome of the takeover battle.Yesterday, Resimac announced that it would apply to the Takeovers Panel, seeking an order to prevent Cadence from voting against the Resimac offer.Resimac has complained previously that Cadence is in the unique position among RHG shareholders of being eligible to receive an all-cash consideration under the Pepper takeover proposal.Resimac will seek an order from the Takovers Panel "to ensure that all other RHG shareholders get a fair opportunity to consider the superior Resimac offer."Cadence and its associates own 17.1 per cent of RHG.Resimac has made an all-cash offer of 49.5 cents a share for RHG, which manages a $2 billion book of mortgages in run-off.Pepper's bid is made up of a cash offer of 36 cents a share plus one fully paid ordinary share in Cadence Capital for every 10 ordinary shares in RHG. Based on the Cadence Capital share price at the time the offer was made, the Pepper offer is worth 50.8 cents a share.Resimac will also seek an order to require Cadence to provide clarity on the possible buy back of Cadence shares under the Pepper plan.Pepper has said it would put a share buyback in place to overcome any illiquidity in the trading of Cadence stock, but Resimac claims there was no firm commitment to conduct a buy back.Resimac has consistently criticised the Pepper bid for failing to deliver "certain value" to RHG shareholders.The firm said yesterday that there was insufficient detail from Pepper about the pricing of the buy back, the rules for participation, whether the buy back would be conducted on-market or off-market and whether it would even go ahead.In a statement issued earlier this month, Pepper's chief executive, Patrick Tuttle, said: "Their [Resimac's] comments around the purported preferentiality, conditionality and uncertainty of our bid are entirely self-serving."Whilst we acknowledge that there is a clear difference between our proposal to acquire RHG and the competing all-cash offer, it is preposterous to suggest that our cash and scrip offer is simply inferior by definition, unless they are asserting that ASX-listed shares in the form of Cadence stock have no economic value."