The Takeovers Panel told the ASX today that Sydney Gas was seeking an interim order to delay the release of the bidder’s statement until several alleged deficiencies were corrected.

As part of its bid, QGC has offered to provide Sydney Gas with a low-cost financing solution for its $A30 million worth of convertible notes due to be repaid to Australian Gas Light by April and June.

But Sydney Gas argues that QGC has not disclosed the “conditional and uncertain nature” of that funding offer.

In addition, Sydney Gas claims that QGC had failed to substantiate forward-looking statements about its future revenue if the proposed merger went ahead.

The company also requested that QGC release further details about its recent debt facilities, contracts under negotiation and the Chinchilla Power Station project.

Sydney Gas is seeking a declaration of unacceptable circumstances, interim and final orders, according to the Takeovers Panel director Nigel Morris.

“The panel has not decided whether to conduct proceedings in relation to the application and makes no comment on the merits of the application,” Morris said.

“It also notes that it has not received submissions from the other parties to the application and it is therefore unaware of their views.”

He added that the panel president was appointing a sitting panel to consider the application.

The Takeovers Panel is the primary forum for resolving disputes about a takeover bid until the bid period has ended. The Panel is a peer review body, with part-time members drawn predominantly from Australia’s takeovers and business communities.

QGC lodged the bidder’s statement with the Australian Securities and Investments Commission (ASIC) and the ASX, and provided one to Sydney Gas last Wednesday, February 15.

At that time, Sydney Gas urged shareholders to take no action in response to the bid. The statement went on to say that the QGC offer was “opportunistic and highly conditional” and QGC had made no secret of Sydney Gas’ high strategic value to the Brisbane-based company’s growth strategy.

In addition, because the consideration consisted of a share swap (two Sydney Gas shares for one QGC share with a condition that QGC secures acceptances for more than 50% of the Sydney Gas shares on issue) the implied value of the offer was uncertain and subject to change.

In the statement, QGC managing director Richard Cottee said the offer was an opportunity for Sydney Gas shareholders to turn around their investments by merging them with QGC, which was a proven performer in the development of coal seam methane.

The bidder’s statement also argued that Sydney Gas shareholders would benefit from increased operational diversity and lower overall risk from QGC’s proven expertise in CSM. They would also receive a substantial premium for their Sydney Gas shares, based on the current value of the two companies.