The Panel says the transaction between King and Bridgecorp announced to the market on August 16 may not comply with the Takeovers Code.
The deal, which gave King $4.04 a share at a time the company’s stock was trading at just over $2.80, enabled Bridgecorp to take its voting rights to 19.99%. But it appears a series of deals at the same time may have tripped Bridgecorp over the 20% stake which would require it to make a full takeover offer for Dorchester.
The Panel says a further 5.05% retained by King and his interests was tied up by Bridgecorp until June 30 next year. It says during that period King and Snowden cannot sell that 5.05% to anyone other than Bridgecorp.
“Bridgecorp also has an option to buy these shares at $3.30 per share. King has also committed to accept any takeover offer made by Bridgecorp for Dorchester during this period at $3.30 or more per share.”
Complicating the issue further is the fact King acquired 0.9% of voting rights in Dorchester from another party around the same time.
The Panel said at the time King may have been an associate of Bridgecorp, may not have acted in compliance with rule 6 of the Code because in aggregate King and Bridgecorp already held or controlled in excess of 20% of the voting rights in Dorchester.
Until the confidential meeting on September 6, five restraining orders have been issued restraining Bridgecorp and King’s voting rights or the sale or issue of any of their shares until September 8.
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