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ARTICLE · 16 DECEMBER 2004

Lessons From the ALH Takeover Contest

Freehills
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The recent takeover contest for control of Australian Leisure & Hospitality Limited (<B>ALH</B>) between Bruandwo (the Woolworths/Mathieson vehicle) and CMM Hotel & Retail Investments (the Coles Myer/Macquarie Bank vehicle) generated extensive media coverage in Australia as the two bidders competed for control of the company pushing the price well beyond the range assessed by the independent expert.

AustraliaAntitrust/Competition Law
Rodd Levy
Rodd Levy

The recent takeover contest for control of Australian Leisure & Hospitality Limited (ALH) between Bruandwo (the Woolworths/Mathieson vehicle) and CMM Hotel & Retail Investments (the Coles Myer/Macquarie Bank vehicle) generated extensive media coverage in Australia as the two bidders competed for control of the company pushing the price well beyond the range assessed by the independent expert.

In this brief article, we examine some of the tactical lessons that emerge from that contest.

Scheme v Bid

Prior to the bid, it was generally thought that a scheme of arrangement was too cumbersome to be effective to compete against a takeover bid, particularly an unconditional bid which could offer immediate payment (as was the Bruandwo bid). The ALH takeover suggests that this will not always be the case.

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