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There have been some really interesting developments recently in the takeovers law area and one of the interesting developments is that private equity funds have actually started making takeover bids.

Now, the conventional wisdom used to be that private equity just wouldn’t do takeovers because they are too risky and the outcome of them was just not assured, but in the last few years, private equity funds are bidding and including the hostile bids for target companies but that has changed in the last few years and private equity funds are making bids, including hostile takeover bids. 

Now, that has had a couple of effects, and it has changed the way that we have had to think about standard takeover bids, because private equity funds have done things rather differently and have used innovative structures in their bids. For example, they like to make sure they have got a lot of target shareholder support and that can mean that they want to get pre-acceptance agreements, that are longer and more elaborate than we have seen in the past, or it might mean that they go around and they rally target shareholder support and together the shareholders then approach, the bidder and the shareholders then approach the target to try to encourage the target board to support the bid. 

As I said, that is just causes to have to look at things from a new point of view.  Another interesting thing that has happened recently is the takeovers panel decision in the NGM Resources Takeover Bid, what was happening there was Paladin was bidding for NGM Resources, NGM was a Uranium prospect in Niger in Africa, the bid contained within it a force majeure clause, which covered a range of things including, terrorism, outbreak of war, hostilities generally. 

After the bid was announced, there was a kidnapping that occurred, ah in a mine site not far from the target mine sites and the bidder decided it wanted to rely on that force majeure condition, to discontinue the bid it was running. 

The target went to the takeovers panel, the panel looked at the force majeure condition and decided that even if it applied on its face, a materiality threshold basically had to be read into the condition and in the view of the panel, this kidnapping wasn’t material, so the panel ordered the bidder to proceed with the bid. It was an interesting decision, because basically the panel was looking at a condition and saying, we don’t like the way that is cast, we are going to read it a different way. 

The point is though, takeovers is an area that really develops constantly, it is always evolving and those are just two examples of that constant evolution.