Article by Rodd Levy and Baden Furphy
Introduction
The Takeovers Panel's recent decision in the National Can Industries Limited case provides a number of important pointers to bear in mind in negotiating break fees. Some of these relate specifically to 'privatisation' or majority buy-out transactions, but others, such as those relating to appropriate triggers for payment of break fees, have more general application.
Background
Michael Tyrrell is the managing director of National Can Industries Limited (NCI). Various members of the Tyrrell family collectively control 51 per cent of NCI.
Mr Tyrrell, through a special purpose bid vehicle—ESK—sought to 'privatise' NCI by acquiring the remaining 49 per cent of NCI from the public via a scheme of arrangement. The initial offer price was $1.40 per share, which valued NCI at $93 million.
