Were there other offers??According to the share purchase agreement between ICL and Allana dated Feb 12th 2014, sections 5.1 & 5.2 cover the issues of a 'standstill covenent' and an Allana Control Transaction respectively.
The standstill covenant states the following:
5.1 Standstill Covenant
Until the date which is eighteen (18) months from the date of this Agreement, the ICL
Group will not directly or indirectly or jointly or in concert with any other Person, except in
accordance with this Agreement, or as provided in Section 5.2:
(a) acquire or agree to acquire, or make any proposal or offer to acquire, directly or
indirectly or in any manner, any securities of Allana
Interesting huh? We are only 13 months from the date of the share agreement and ICL looks like it has brokensection 5.1 by making a takeover offer....or has it?
Section 5.2 states the following:
5.2 Allana Control Transaction
If, at any time and from time to time, a Person or Persons acting jointly or in concert (other
than the ICL Group or a Person that is not at arm's length to the ICL Group) publicly announces its intention to commence, commences, or takes any steps in furtherance of, an Allana Control
Transaction, or Allana publicly announces that it or the Allana Board has approved an agreement which contemplates an Allana Control Transaction, the ICL Group shall be immediately released from the restrictions of Section 5.1. Notwithstanding the prior provisions of this Section 5.2, if the offer with respect to an Allana Control Transaction is withdrawn or an Allana Control Transaction is otherwise terminated, the restrictions outlined in Section 5.1 shall be deemed to have been re-imposed as of the end of the seventy-five (75) day period following such withdrawal or termination, (i) for only for so long as the first sentence of this Section 5.2 is not applicable and (ii) unless, prior to the expiry of such seventy-five (75) day period, a member of the ICL Group has commenced a transaction similar to or that may lead to the same result as the Allana Control Transaction which was withdrawn or terminated.
This makes me conclude that either (i) there was an offer made from a third party that enabled ICL to make a competing bid within the standstill covenant timeframe or that (ii) Farhad approached ICL with a buyout offer instead of the other way round. In either situation, should there not have been disclosure to shareholders??