Takeover - CSR

The Share Wealth Systems ASX Public Portfolio is holding an open position in CSR which is currently under a takeover.

The announcement was made after the market close on February 25th 2024. CSR was in a trading halt on that day and this can be seen on the chart below.

In accordance with the ASX Public Portfolio Investment Plan, the position will be closed 20 market days after the takeover announcement on March 25th.

This avoids capital being exposed for potential lengthy delays or trading halts that might occur as a result of the takeover process. Members that don’t have a “takeover” action as part of their Investment Plan need to think about how these situations will be handled, so as not to be caught off guard.

Prior to the announcement there was speculation that an offer was in the pipeline and this case be seen in the large bar 4 days prior to the official announcement.

After the official announcement was released the price of CSR rose again, but has now drifted sideways. This is quite common for stocks in this scenario.

Hi David, what is the logic of the 20 day rule?
What’s the rule for a potential takeover but not finalised?
Cheers, Lucy

Hi Lucy,

The 20 day rule was added to the Public Portfolio Investment Plans so that capital isn’t tied up for too long in the takeover process. Companies under takeover might go into a trading halt for an extended period of time and having a small window of time (20 days) reduces the risk of this occurring.
This still allows some time for a new offer from a potential rival which might add to the premium and therefore price in the shorter term.

Regards,
David.