MEDIA RELEASE

No: TP22/34

Thursday, 28 April 2022

Nex Metals Explorations Ltd 05 - Declaration of Unacceptable Circumstances and

Orders

The Panel has made a declaration of unacceptable circumstances (Annexure A) and final orders (Annexure B) in relation to an application dated 18 March 2022 by Metalicity Ltd in relation to the affairs of Nex Metals Explorations Ltd (seeTP22/23).

Background

On 14 September 2021, Metalicity announced its intention to make an off-market scrip takeover bid for Nex Metals on the basis of 4.81 Metalicity shares for each Nex Metals share (Bid). On 24 September 2021, Metalicity issued and served its bidder's statement in relation to the Bid.

On 29 October 2021, Nex Metals issued and served its target's statement in relation to the Bid (Target's Statement), which was released on ASX on 1 November 2021.

On 30 November 2021, the Panel in Nex Metals Explorations Ltd 02 made a declaration of unacceptable circumstances and orders in relation to the affairs of Nex Metals.1 In those proceedings, the Panel considered (among other things) that there were unacceptable circumstances because it considered that there were material deficiencies in the Target's Statement and contraventions of sections 638(1) and 670A(1).2 The Panel made orders, including that Nex Metals must prepare a replacement target's statement, in a form that ASIC does not object to, that complies with section 638.3

On 17 March 2022, Nex Metals issued and served its replacement target's statement in relation to the Bid (Replacement Target's Statement). The Replacement Target's Statement stated that it had been "ordered by the Takeover[s] Panel to replace the Original Target's Statement" and included the Nex Metals' directors' unanimous recommendation that Nex Metals shareholders reject the Bid in the absence of a

  • 1 Nex Metals Explorations Ltd 02 (seeTP21/42)

  • 2 References are to the Corporations Act 2001 (Cth) unless otherwise indicated

  • 3 Additional orders were made on 17 December 2021 (seeTP21/48)and the orders were subsequently varied on

21 January 2022 (seeTP22/08)and on 10 February 2022 (seeTP22/14)

higher offer. ASIC issued a confirmation that it did not object to the form of the Replacement Target's Statement.4

Declaration

The Panel considered that the circumstances were unacceptable because, among other things, the Replacement Target's Statement:

  • • contains information deficiencies, and constitutes or is likely to constitute a contravention of section 638(1) or section 670A(1) or both, in that:

    • o it omits material information

    • o it includes statements that are misleading or confusing in material respects and

    • o it includes statements that are incorrect and

  • • does not disclose, including because of the information deficiencies outlined above, a sufficient basis upon which Nex Metals' directors recommend that shareholders reject the Bid.

The Panel did not consider it against the public interest to make the declaration, and in making it had regard to the matters in section 657A(3).

Orders

The Panel has made orders that (in effect):

  • • Nex Metals must as soon as practicable and by no later than the end of trading on the day after the date of the Panel's orders make a market announcement that:

    • o the Replacement Target's Statement contains information deficiencies and does not disclose a sufficient basis upon which Nex Metals' directors recommend that shareholders reject the Bid

    • o refers to the information deficiencies identified by the Panel, as set out in the annexure to the Panel's orders (a copy of which must also be enclosed with the market announcement) and

    • o the Panel has ordered that Nex Metals must prepare and send each Nex Metals shareholder a supplementary or replacement target's statement, in a form that ASIC does not object to, that addresses the information deficiencies.

4 ASIC submitted that it does not assume any responsibility for, or guarantee the accuracy of, the content of the Replacement Target's Statement. That approach is consistent with ASIC's policy in respect of disclosure documents

  • • Nex Metals must prepare a supplementary or replacement target's statement (as, in its opinion, is most convenient for shareholders of Nex Metals) that, among other things, addresses the information deficiencies (including those identified in the annexure to the Panel's orders) and complies with section 638.

  • • Nex Metals must not lodge and dispatch the supplementary or replacement target's statement (as applicable) until ASIC has provided written confirmation that it does not object to the form of the supplementary or replacement target's statement (as applicable).5

  • • Nex Metals must provide to ASIC a draft supplementary or replacement target's statement (as applicable) that substantively complies with the disclosure requirements under the Panel's orders by 13 May 2022.

The Panel proposes to seek further submissions from the parties as to whether a costs order should be made.

The sitting Panel was Elizabeth Hallett (sitting President), Christian Johnston and Rob McKenzie.

The Panel will publish its reasons for the decision in due course on its websitewww.takeovers.gov.au.

Allan Bulman

Chief Executive, Takeovers Panel Level 16, 530 Collins Street

Melbourne VIC 3000

Ph: +61 3 9655 3500takeovers@takeovers.gov.au

5 Noting ASIC's role as explained in fn 4

ANNEXURE A CORPORATIONS ACT

SECTION 657A

DECLARATION OF UNACCEPTABLE CIRCUMSTANCES

NEX METALS EXPLORATIONS LTD 05

BACKGROUND

  • 1. On 14 September 2021, Metalicity Ltd (Metalicity) announced its intention to make a conditional off-market bid for all the ordinary shares in Nex Metals Explorations Ltd (Nex Metals), offering 4.81 Metalicity shares for every 1 Nex Metals share (Bid).

  • 2. On 24 September 2021, Metalicity issued and served its bidder's statement in relation to the Bid.

  • 3. On 29 October 2021, Nex Metals issued and served its target's statement in relation to the Bid (Target's Statement), which was released on ASX on 1 November 2021.

  • 4. On 30 November 2021, the Panel made a declaration of unacceptable circumstances and orders in relation to the affairs of Nex Metals.1 In those proceedings, the Panel considered (among other things) that there were unacceptable circumstances because it considered that there were material deficiencies in the Target's Statement and contraventions of sections 638(1) and 670A(1).2 The Panel made orders, including that Nex Metals must prepare a replacement target's statement, in a form that ASIC does not object to, that complies with section 638.3

CIRCUMSTANCES

5.

On 17 March 2022, Nex Metals issued and served its replacement target's statement in relation to the Bid (Replacement Target's Statement). The Replacement Target's Statement stated that it had been "ordered by the Takeover[s] Panel to replace the Original Target's Statement" and included the Nex Metals' directors' unanimous recommendation that Nex Metals shareholders reject the Bid in the absence of a

  • 1 Nex Metals Explorations Ltd 02 (seeTP21/42)

  • 2 References are to the Corporations Act 2001 (Cth) unless otherwise indicated

  • 3 Additional orders were made on 17 December 2021 (seeTP21/48)and the orders were subsequently varied on

21 January 2022 (seeTP22/08)and on 10 February 2022 (seeTP22/14)

higher offer. ASIC issued a confirmation that it did not object to the form of the Replacement Target's Statement.4

  • 6. The Panel considers that the Replacement Target's Statement contains information deficiencies, and constitutes or is likely to constitute a contravention of section 638(1) or section 670A(1) or both, in that:

    • (a) it omits material information

    • (b) it includes statements that are misleading or confusing in material respects and

    (c)it includes statements that are incorrect.

  • 7. The Panel considers that the Replacement Target's Statement does not disclose, including because of the information deficiencies in paragraph 6, a sufficient basis upon which Nex Metals' directors recommend that shareholders reject the Bid.

EFFECT

  • 8. Nex Metals shareholders have not been given sufficient information to enable them to consider the merits of the Bid.

  • 9. The market for control of Nex Metals shares is not taking place in an efficient, competitive and informed market.

CONCLUSION

10.

It appears to the Panel that the circumstances are unacceptable circumstances:

  • (a) having regard to the effect that the Panel is satisfied they have had, are having, will have or are likely to have on:

    • (i) the control, or potential control, of Nex Metals or

    • (ii) the acquisition, or proposed acquisition, by a person of a substantial interest in Nex Metals and

  • (b) in the alternative, having regard to the purposes of Chapter 6 set out in section 602 and

  • (c) in the further alternative, because they constituted, constitute, will constitute or are likely to constitute a contravention of a provision of Chapter 6 or of Chapter 6B.

4 ASIC submitted that it does not assume any responsibility for, or guarantee the accuracy of, the content of the Replacement Target's Statement. That approach is consistent with ASIC's policy in respect of disclosure

documents

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

Metalicity Limited published this content on 28 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 April 2022 06:44:09 UTC.