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03 Jun 2009

Clayton Utz advises on ground-breaking Takeovers Panel application

Sydney, 3 June 2009: Clayton Utz' M&A team has successfully represented Hong Kong based Noble Group in its acquisition of control of Gloucester Coal which followed ground-breaking proceedings before the Takeovers Panel that resulted in a declaration of unacceptable circumstances in relation to the affairs of Gloucester Coal.

The team, led by partners John Elliott and Karen Evans-Cullen, succeeded in an application to the Panel on behalf of client Noble Group in relation to a scrip bid - effectively a reverse takeover - by Gloucester Coal for Whitehaven Coal.

Noble, which owned 21.7 per cent of Gloucester, had earlier made an all-cash offer of $4.85 per share (approx. A$400m) for Gloucester on the condition the Gloucester/Whitehaven merger did not proceed. During the course of the bid, markets in general and the coal sector in particular improved markedly, and Noble increased its offer to $7.00 per share.

Clayton Utz' success before the Panel allowed Noble to proceed with its own takeover bid for Gloucester, an opportunity which was not available to Noble without the Panel ruling. Noble has since moved to outright control of Gloucester.

Mr Elliott, who co-heads Clayton Utz' national M&A practice and has advised on many Panel actions, said the Noble application and its success were "ground breaking".

"The Panel's declaration, as well as validating our strategy and implementation, confirms that structures that lock out potentially interested parties or rival proposals - structures which some market participants had previously thought to be 'bullet proof '- risk a declaration of unacceptable circumstances in Panel proceedings."

Ms Evans-Cullen noted that the outcome of Noble's bid for Gloucester validated the arguments Clayton Utz made to the Takeovers Panel that shareholders, not directors, should be able to determine the outcome of control proposals.

"As soon as Noble's bid was allowed to be considered by Gloucester shareholders, those shareholders demonstrated what they wanted by transferring control of Gloucester to Noble within a week."

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.