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Lost in the Forrestania: navigating disclosure requirements in public M&A 

September 29, 2026

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    Ahead of the Deal - Australian M&A briefing

    Key Insights

    • Bidders need to carefully manage conflicts between bidder's statement disclosure obligations and confidentiality obligations owed to third parties (and other potential commercial consequences of required disclosure of commercially sensitive information in the bidder's statement).
    • Where a potential bidder planning to offer scrip consideration is concurrently participating in a separate M&A process that could have a material impact on the value of its shares, it will need to as part of its bid planning consider:
      • whether information regarding that separate potential deal may be required to be disclosed in its bidder's statement;
      • if so, whether confidentiality obligations owed to third parties or other commercial considerations will create difficulties for the bidder in disclosing the material information in the bidder's statement; and
      • if so, whether it will be possible to obtain consent from the third party for the disclosure in the bidder's statement or if the bidder will need to take steps to delay the finalisation and dispatch of the bidder's statement until it is in a position to provide adequate disclosure of that information in the bidder's statement, while still complying with its legal requirements regarding bidder's statement contents and timing.
    • Pre-bid acquisition strategy needs to have regard to substantial holding disclosure obligations. Bidders need to consider the timing of pre-bid acquisitions to avoid triggering a substantial holding disclosure obligation before they are ready to publicly announce their bid.

    Background

    Zenith Minerals Limited, an ASX-listed resources company focused on gold, lithium and base metal projects, is currently the subject of a recommended off-market takeover bid by Forrestania Resources Limited for scrip consideration of 1 Forrestania share for every 4.3 Zenith shares, subject to a minimum acceptance condition of 50.1% (Bid). The Bid was announced on 9 June 2026.

    The lead-up to, and conduct of, the Bid involved circumstances relating to ASX announcements, bidder's statement disclosure and substantial holder notices that have now been the subject of a declaration of unacceptable circumstances by the Takeovers Panel.

    The key events leading up to the Bid were as follows:

    • In late March 2026:
      • Zenith issued 22 million performance rights to its directors. While the performance rights did not provide for automatic vesting on a takeover bid occurring, the board retained a discretion to determine that unvested awards would vest and become exercisable on a change of control.
      • Forrestania and Zenith entered into a confidentiality deed in relation to a potential transaction between the parties.
      • Forrestania was invited to participate in a sale process to acquire the Edna May Gold Hub from Ramelius Resources Ltd. Forrestania subsequently submitted a non-binding indicative offer to Ramelius to acquire Edna May in early May 2026.
    • Between 10 April 2026 and 13 April 2026, Forrestania entered into a number of agreements with various parties which, upon completion, would result in Forrestania holding 9.9% of Zenith shares (April Acquisition Agreements).

    On 9 June 2026, Zenith and Forrestania announced that they had executed a binding takeover implementation deed for the Bid (TID). Following the announcement of the Bid:

    • After market close on 9 June 2026, the bidder's statement and target's statement were released to ASX. Neither document mentioned Forrestania's involvement in the sale process for the Edna May Gold Hub. Dispatch of the bidder's statement to Zenith shareholders was completed on 16 June 2026.
    • In parallel with the Bid, Forrestania continued to pursue the Edna May transaction with Ramelius. It submitted a final binding offer to Ramelius on 15 June 2026, was notified as the preferred bidder on 23 June 2026 and, on 29 June 2026, announced entry into binding agreements to acquire the Edna May Gold Hub for total consideration of $300 million in cash and scrip. The Edna May acquisition and associated capital raising involved aggregate equity issuances amounting to an approximately 76% increase in Forrestania's shares on issue.
    • On 7 July 2026, Forrestania released a supplementary bidder's statement disclosing the Edna May transaction. Zenith followed with a supplementary target's statement on 8 July 2026, in which the board reaffirmed its recommendation that shareholders accept the Bid.
    • On 23 July 2026, Forrestania released an ASX announcement in which it stated that it had “received acceptances that equate to a 41.74% voting power in Zenith” and that “Zenith Directors (and entities that they control) still hold approximately 39 million Zenith Shares or securities capable of being converted into Zenith Shares, which would increase Forrestania’s acceptances to close to 50.1%. The Zenith Directors have confirmed their recommendation that Zenith shareholders accept Forrestania’s offer”.

    The Panel's declaration of unacceptable circumstances and orders

    The Panel made a declaration of unacceptable circumstances in relation to applications from Harvest Lane Asset Management Pty Ltd and Ida Metal Investments Pty Ltd (both Zenith shareholders) in relation to the affairs of Zenith, and subsequently also made final orders to address those circumstances.

    The key reasons for the Panel's declaration, and the key orders it made to address the issues identified in the declaration, indicate the extent and depth of the Panel's concerns with those circumstances:

    Issues Orders

    Failure to give substantial holder notice:

    • The Panel found that the April Acquisition Agreements gave Forrestania a substantial holding in Zenith in April 2026 (that is, at the time Forrestania entered into those agreements, not just upon their completion).
    • However, Forrestania did not disclose its substantial holding as required under the Corporations Act until 9 June 2026, the date it announced the Bid.
    • Accordingly, Zenith shareholders and other investors were denied the opportunity to react to, and Forrestania avoided the potential market consequences of, Forrestania’s accumulation of substantial interests in the pre-bid period. Forrestania’s bidder’s statement also did not include certain information concerning the April Acquisition Agreements required by the Corporations Act.
    • Forrestania provide corrective substantial holding disclosure including further disclosure regarding the April Acquisition Agreements.
    • Forrestania also include in a supplementary bidder's statement details of certain benefits Forrestania agreed to provide in the April Acquisition Agreements (see below).
    • The number of Zenith shares the subject of the April Acquisition Agreements be disregarded in determining:
      • Forrestania’s voting power for the purposes of Forrestania acquiring further shares in Zenith under the 3% ‘creep’ provisions (with the number of shares to be disregarded reducing over time);
      • how many Zenith shares in relation to which Forrestania and its associates can exercise voting rights; and
      • when certain rights or steps under the TID that are referable to Forrestania acquiring more than 50.1% of all Zenith shares on issue can be exercised or implemented.

    Deficient disclosure in the bidder's statement:

    • The Panel found that Forrestania's bidder’s statement failed to disclose the potential impact that Forrestania’s involvement in the sale process for the Edna May assets could have on its Bid for Zenith, and associated risks.
    • This was material information for Zenith shareholders and the Zenith board because the magnitude of any acquisition of the Edna May assets meant it was capable of significantly affecting matters such as Forrestania’s assets, business, finances, capital structure and prospects, and in turn the value of Forrestania shares – and so of the consideration being offered to Zenith shareholders under the Bid.
    • Forrestania prepare a supplementary bidder’s statement, provide it to ASIC and the Panel for comment, and send a version to which the Panel does not object to each Zenith shareholder.
    • Forrestania, in the supplementary bidder’s statement, provide supplementary disclosure:
      • regarding the right of Zenith shareholders to withdraw their acceptance of the bid;
      • clarifying aspects of the statements in Forrestania’s announcement of 23 July 2026 (see below);
      • setting out details of certain benefits Forrestania agreed to provide in the April Acquisition Agreements (see above) and
      • explaining the nature and effect of the Panel’s orders.
    • Forrestania ensure that offers under its bid are not declared free of any defeating condition before one week after the disclosures required in its supplementary bidder's statement (and its corrective substantial holder disclosure and Zenith's supplementary target's statement (see below)) have been made, and do not close before three weeks after that time.

    Deficient supplementary target's statement:

    • The Panel found that Zenith's first supplementary target's statement was deficient because: it did not properly engage with the material change in circumstances arising from the Edna May transaction.
    • It did not provide shareholders with sufficient information to make an informed assessment of the impact of the changed circumstances, including the Zenith board's consideration of the transaction and its decision to reaffirm its recommendation.
    • Zenith prepare a supplementary target’s statement, provide it to ASIC and the Panel for comment, and send a version to which the Panel does not object to each Zenith shareholder.
    • Zenith, in the supplementary target’s statement, either:
      • include an independent expert’s report providing an opinion on whether the offers under the bid are fair and reasonable or
      • provide a further explanation of the directors’ decision to continue to recommend that Zenith shareholders accept Forrestania’s offer following the Edna May transaction

    Misleading 23 July announcement:

    • The Panel considered that Forrestania's 23 July 2026 announcement was misleading or apt to mislead, including because:
      • it was unclear as to which shares or securities were included in the stated 39 million Zenith shares or convertible securities held by the Zenith directors, particularly having regard to previous disclosures which suggested that the directors held fewer securities after accounting for those that had already been accepted into the Bid prior to that date; and
      • it created an impression that Forrestania had effectively reached, or was assured of reaching, majority control of Zenith. This was misleading because under the terms of the performance rights, the Zenith directors could only exercise their discretion to vest the performance rights (and so accept the Bid in respect of the Zenith shares that would be issued on their exercise) after Forrestania had already reached 50.1% and its Bid had been declared free of defeating conditions.
    • The Panel also noted that one Zenith director's acceptance of the Bid on the first day it opened was inconsistent with his stated intention to accept in the absence of a superior offer, as it did not allow a reasonable period for such an offer to eventuate.1
    • Forrestania, in the supplementary bidder’s statement (see above), provide supplementary disclosure clarifying aspects of the statements in Forrestania’s announcement of 23 July 2026;

    TID provisions providing undue influence:

    The Panel identified three clauses of the TID which had the capacity to provide Forrestania with an undue level of influence over Zenith's board’s response to the Bid throughout the course of the Bid:

    • The 'no independent expert report' clause, under which the parties agreed that an independent expert's report was not required and Zenith would not commission one.
    • The 'board replacement' clause, requiring Zenith to reconstitute its board with Forrestania's nominees within two business days of Forrestania reaching 50.1% and the Bid being declared unconditional.
    • The 'agreed disclosure' clause, preventing public announcements relating to the transaction without mutual written approval.
    • In addition to the orders outlined above Forrestania's rights or steps under the TID that are referable to Forrestania acquiring more than 50.1% of all Zenith shares on issue may not be exercised and those steps may not be implemented until three weeks after dispatch of the supplementary disclosure outlined above.
    • Any provision of the TID is void to the extent that it may prevent, or impede, the ability of Zenith or its directors to commission, or include in the supplementary target’s statement, an independent expert’s report (see above).

    The Panel also ordered that Forrestania pay costs incurred in connection with the Panel proceedings by the two Zenith shareholders who brought the Panel proceedings – further demonstrating the Panel's increased willingness to impose costs orders.

    As at the date of this article, the Panel has yet to publish its reasons. Forrestania applied for a review of the Panel's decision, and Ida Metal (one of the applicants) separately sought a review of the orders imposed by the Panel. On 28 September 2026, the review Panel affirmed the initial Panel's decision to make a declaration of unacceptable circumstances and orders, and stated that it substantially agreed with the initial Panel's conclusions.

    It is also possible that ASIC may consider enforcement action in relation to Forrestania's failure to lodge its substantial holder notice. The potential consequences of such a failure will increase on and from 4 December 2026, when the maximum penalties under the Corporations Act for failing to give a substantial holding notice will double.

    Commentary

    While the Panel's declaration and orders address a number of issues worthy of consideration by bidders and targets alike, it brings into particular focus disclosure issues for bidders, in particular regarding the disclosure of pre-bid acquisitions and dealing with conflict between statutory obligations to disclose information in bidder's statements and confidentiality obligations owed to third parties in respect of relevant information.

    Managing timing of pre-bid acquisitions having regard to substantial holder disclosure obligations

    There are obvious commercial consequences for a bidder that discloses the acquisition of a pre-bid stake prior to announcement of a takeover offer. Disclosure of the acquisition of a substantial stake in a company will alert the market that a takeover bid may be imminent, which may result in an increase in the target's share price prior to the announcement of the bid to the detriment of the bidder and also alert other potential rival bidders of the substantial holder's interest in the target.

    The definition of "relevant interest" in the Corporations Act is broad and includes an 'accelerator provision' under which a person is taken to have a relevant interest in shares when an agreement to acquire those shares is entered into, even though the acquisition has not yet completed. If that acquisition takes the person's voting power to 5% or more, the person will have a substantial holding and must give a substantial holder notice to the ASX within two business days. Any further acquisitions after that which result in the substantial holder's voting power increasing by a further 1% or more requires a further disclosure to the ASX. Bidders therefore need to carefully manage the timing of pre-bid acquisitions to avoid triggering a substantial holder disclosure obligation before they are ready to announce the bid. A bidder will typically wish to ensure that it remains below the 5% threshold during the pre-bid period, with any further pre-bid acquisitions that take its voting power to 5% or more only occurring within two business days before the takeover bid is announced.

    Failure to make the required substantial holder notice disclosure within the two business day timeframe is a contravention of the Corporations Act and may also lead to a declaration of unacceptable circumstances by the Panel. The Panel emphasised in its declaration that timely disclosure is a key part of ensuring that investors know when a person is accumulating a significant interest ahead of, or as part of, a possible control transaction. In this case, the failure to disclose meant that the market was not adequately informed and Zenith shareholders and other investors were denied the opportunity to react to Forrestania's accumulation of a substantial pre-bid stake, while Forrestania avoided the potential market consequences of the public disclosure of that information.

    Dealing with conflicting statutory duties of disclosure in bidder's statements and confidentiality obligations owed to third parties

    Background

    A key disclosure issue that arose in Zenith was Forrestania's failure to disclose its involvement in the Edna May sale process in the original bidder's statement.

    Forrestania was concurrently participating in a competitive sale process for the Edna May assets run by Ramelius and its financial adviser. There were obvious commercial reasons for Forrestania not wanting to disclose its involvement in the Edna May sales process, including not wanting to alert other potential Edna May bidders to its interest in the process or to reveal details of any of the terms of offer to Ramelius before Forrestania had signed a binding sale and purchase agreement with Ramelius. Forrestania would have also owed confidentiality obligations to Ramelius under a confidentiality agreement governing that sales process.

    The key question this raises is what to do when a bidder is in possession of material information that is required to be disclosed in the bidder's statement, but is also subject to confidentiality obligations owed by the bidder to a third party which restrict the bidder's ability to include that information in its bidder's statement.

    Confidentiality agreements will generally restrict the disclosure of confidential information subject to specified exceptions. A common exception permits disclosure where required by law, although the scope of that exception will depend on the terms of the particular agreement. For example, the exception may be drafted so as not to apply where the need for disclosure arises from a voluntary act of the recipient, such as the making of a takeover bid. If the "required by law" exception does not permit disclosure of information that must be included in a bidder's statement, a potential conflict arises between the bidder's contractual duty of confidence on the one hand and its statutory disclosure obligations on the other.

    The Panel considered this issue in Skywest Limited 03. The Panel considered that, where a bidder holds non-public information that may be required to be disclosed but is subject to the legal rights of another person, the bidder should first approach that person and seek consent to include the information in its bidder's statement. Where the person whose consent is sought is the target, the Panel indicated that a refusal to consent may itself constitute unacceptable circumstances in certain situations – for example, where the target would itself be required to disclose the information in its target's statement.

    Importantly, however, the Panel did not resolve the more difficult question of whether, and in what circumstances, a bidder may disclose information in its bidder's statement notwithstanding an obligation of confidence to a third party that has not been waived. The Panel recognised the competing considerations: an overly strict approach to confidentiality could allow confidential information to be used to prevent a bidder from preparing a compliant bidder's statement, while an overly permissive approach could undermine the value of important confidential information.

    In subsequent decisions, the Panel has continued to recognise the tension between obligations of confidence and a bidder's statutory disclosure obligations, without expressing a conclusive view as to when one or the other should prevail.

    Where the courts have considered this issue, the scope of the "required by law" exception in the relevant confidentiality agreement has been a key consideration in determining whether disclosure is permitted. There is also authority suggesting that, where a statutory disclosure obligation conflicts with an equitable obligation of confidence, the statutory obligation may prevail.

    Lessons from Zenith

    For a bidder offering scrip consideration, particular care is required where the bidder is concurrently participating in a separate M&A process that could have a material impact on the bidder's assets, financial position, business or prospects and, in turn, the value of the scrip consideration being offered. The bidder should consider at an early stage whether it will need the relevant third party's consent to enable sufficient disclosure of the M&A process in the bidder's statement and whether it will be feasible to obtain that consent.

    If consent cannot be obtained (which may often be the case) or disclosure of the confidential information would be materially commercially prejudicial to the bidder's prospects of success in that other M&A process at that time, the bidder will need to consider whether it should take steps to facilitate delay of finalisation and dispatch of the bidder's statement until the bidder is in a position to provide adequate disclosure of the material matter in the bidder's statement – for example, after the concurrent M&A transaction has been signed and announced, or after the bidder has ceased participating in the concurrent M&A process.

    In the Zenith transaction Forrestania agreed with Zenith to nominate an earlier dispatch date than would otherwise have applied under the Corporations Act. Forrestania announced the Bid and gave its bidder's statement to ASX and Zenith on 9 June 2026, at which time it was already at an advanced stage in the Edna May sale process and knew that it had been shortlisted to submit a final binding offer and that binding offers for Edna May were due before the Bid was scheduled to open on 16 June. Forrestania submitted its final binding offer to Ramelius for the Edna May transaction on 15 June and dispatched its bidder's statement the following day, on 16 June. Forrestania was subsequently notified by Ramelius on 23 June that it was the preferred bidder, and the Edna May transaction was signed and announced on 29 June.

    While Zenith was not aware of the participation by Forrestania in the concurrent Edna May process, and delaying the Bid without explanation may have raised suspicion from Zenith, Forrestania could nevertheless have delayed dispatching its bidder's statement to Zenith shareholders, until it knew the outcome of the Edna May process and was able to disclose the Edna May transaction, instead of sending the offers early.

    While there are strategic advantages to dispatching a bidder's statement early, a bidder may need to delay dispatch where that is necessary to ensure that it can comply with its statutory disclosure obligations in the bidder's statement. As the Panel's declaration and orders here demonstrate, failing to comply with those disclosure obligations can have significant adverse consequences for a bidder.

    Authors: Carl Della-Bosca, Partner and Daniel Lucanus, Senior Associate.

    1. The Takeovers Panel's Guidance Note 23: Shareholder intention statements says that if a statement is qualified by reference to a superior proposal, it is likely to give rise to unacceptable circumstances if the shareholder accepts before allowing a reasonable time to pass for a superior proposal to emerge. The Panel considers that this is implied by the statement. The amount of time required will depend on the circumstances, but generally the Panel will consider a reasonable time to be 21 days after the offer has opened. 

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    The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
    Readers should take legal advice before applying it to specific issues or transactions.

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