Bell bid no longer ‘Clayton’s bid’

Press, 19 February 1986, Page 39

Bell bid no longer ‘Clayton’s bid’

By

Russell Grimmer

of AAP (through NZPA)

PA Melbourne Mr Robert Holmes a Court has raised both the credibility and the magnitude of his bid for BHP with the formal announcement of a proportional sAust7.7o a share offer for 50 per cent of each shareholder’s holding. Mr Holmes a Court said the formal bid documents registered by the Victorian Corporate Affairs Commission represent a total bid of sAust3.s billion for BHP.

He said the cash offer would go as high as $2 billion, with the balance being made up in Bell shares under the cash scrip alternative of one Bell Resources, Ltd, share plus $2.50 in cash for each BHP share.

Analysts said total acceptance of the all-cash bid would give Mr Holmes a Court control of about 40 per cent of the “Big Australian” while the cash scrip alternative could give him more than 50 per cent. The offer — no longer considered a “Clayton’s bid" by BHP — has taken the wind out of BHP’s claims that the Bell Group intends to divide the company into separate business units.

In what analysts have described as a key strategy step, the Holmes a Court take-over documents say Bell has no plans to change or discontinue any of BHP’s existing businesses.

Mr Holmes a Court told a press conference that a Bell seat on the BHP board was still a condition of the bid but any new director appointed on votes of Bell would be obliged to act in the interest of all BHP shareholders, rather than on the directions of Bell Resources, Ltd. “Bell believes that if its offer is successful it will have defacto control of BHP and be able to influence the composition of the BHP board,” he said. “But Bell will not have direct control over BHP’s management in the nor-

mal conduct of the company’s businesses,” he said.

Mr Holmes a Court said it was not Bell’s present intention to seek the removal of any particular director of BHP, but Bell could seek to make changes to the board’s composition in the future.

He said the success of the offer would result in BHP remaining a widelyheld Australian corporation.

Mr Holmes a Court said the bid was now for 50 per cent of shareholders’ holdings because of its proportional nature.

This removed the risk from shareholders, and placed it squarely on the offeror — Bell Resources — he said. The offer retained a minimum acceptance condition of 250 million shares but included two new conditions: • that Bell not be required to pay in cash more than sAust2 billion;

• that Bell not be required to issue more than

250 million ordinary Bell shares. Mr Holmes a Court said BHP shareholders would be able to accept for either consideration or a mixture of both and, most importantly, they could continue to trade the balance of their shares during the offer period. He said previous conditions — that Bell be given a seat on the BHP board and there be no material change during the currency of the offer in the import parity price for Bass Strait crude oil — were considered vital because of the magnitude of the bid and the possible effect the fluctuating price of oil could have on the value of BHP. Bell and its associates now hold 19 per cent of BHP’s issued capital against 18.8 per cent on February 6 when it announced its plans to make a pro-rata bid for 250 million BHP shares to take its holding to about 40 per cent.