Takeover rules: By last week, Melgan had received 34.3 per cent irrevocable acceptances for its offer, and a commitment to accept the offer in respect of 1.9 per cent of the company.

The acceptances included the 12.4 per cent of the company controlled by Melgan itself. Its backers include chief executive Dr Tony Mullins, the Barlow family, executive board members and private backers.

Anyone who has accepted Melgan's offer will be free to accept the higher Sarcon bid from April 9th, if Melgan does not table a higher offer before that. This appeared to be unlikely last night.

Under normal takeover rules, anyone who has accepted an offer for shares in a listed company before a third party tables a competing bid, must wait 42 trading days from the date of their acceptance before they are free to accept the new offer.

Melgan's offer document contained a clause stating that if any third party made a competing offer of at least 44 cents before March 12th, the MBO's backers would agree to accept this, or table a higher bid than the third party's offer within two weeks.

As Sarcon's competing offer was made well after March 12th, it is understood that this clause is void. Thus the 42-day rule applies to anyone who accepted the Melgan offer.

As the shareholders involved committed themselves to accepting Melgan's offer on February 10th, they must wait a further two weeks before they can accept the Sarcon offer. Anyone who has not accepted Melgan's offer is free to accept the Sarcon bid at the first opportunity.

Sarcon has committed itself to posting its own offer document to Barlo shareholders within 28 days. However, it is understood that shareholders will not have to wait that long before receiving the offer document.

An extraordinary general meeting (e.g.m.), scheduled for today to get approval for aspects of the Melgan deal, will go ahead, but shareholders will instead be asked to vote on a resolution to adjourn the meeting.