Further to the Alert issued by Jones Day on 12 April 2016, the Australian Takeovers Panel ("Panel") released its Reasons for Decision ("Reasons") in the Metro Mining Limited and Gulf Alumina Limited matter on 15 April, 2016.

In the Reasons, the Panel confirms, with reference to its previous decisions in Tully Sugar Limited and Sirtex Medical Limited (these decisions were discussed in our initial Alert), that outside the prescribed circumstances in section 640 of the Corporations Act, and provided a target company's board is not otherwise "beholden to the bidder", target company directors do not need to obtain an independent expert's report to support undervalue statements they make to shareholders in a target's statement.

However, the Panel does not elaborate in the Reasons on the meaning and scope of its order for the directors of Metro Mining Limited to, in the absence of an independent expert's report, provide shareholders with valuation information "in a manner consistent with ASIC's Regulatory Guide 111".

Accordingly, the prospective uncertainty for target company directors identified in our Alert, and the potential tactical advantages that may be realised for bidders as a result of target company directors needing to provide more extensive valuation disclosure, is now very real. Target company directors are now left in the unenviable position of being unable to pinpoint precisely what is required of them in meeting their disclosure obligations under the Corporations Act in support of statements they make to shareholders about the target's value.

To ensure that directors are provided with clear guidance in complying with their valuation disclosure obligations, it would be useful for the Panel to issue an update to its Guidance Note 22 (Recommendations and Undervalue Statements).