Pallinghurst Resources is setting new rules for M&A when it comes to its proposed buyout of Consolidated Minerals Ltd (ASX:CSM). The London-based hedge fund announced a renewed takeover bid for the company at A$4.10 per share and included a provision that said shareholders who tendered their shares would received a payout equal to any higher bids during the next three weeks.

Many analysts and researches are eager to see if this move will convince substantially more shareholders to tender their shares, since the fear of losing out on a higher bid is removed. Meanwhile, the shares tendered by the hedge fund can easily be used in a proxy contest to vote for its own merger or replace board members and recommend its own merger.

"By accepting the Pallinghurst offer, shareholders will receive certain cash of A$4.10, and will still retain full potential upside should a rival offer emerge," said Brian Gilbertson, the head of Pallington.

The bidding that started out at just A$2.28 per share has risen to this level after two other bidders emerged, with the latest one offering A$3.70 for the company. Another bidder is also said to be conducting due diligence right now with a 5.1 percent stake built up in the company. Where this deal goes remains to be seen, but many are watching this new tactic with great interest!

Related Companies
Delta Petroleum Corp. (DPTR)
Dorchester Minerals (DMLP)
Berry Petroleum Company (BRY)