Takeovers Panel Probes Duxton Farms Merger Amid Shareholding Dispute

Background to the Dispute

Duxton Farms Ltd (ASX – DBF), a prominent agricultural investment company managing a diverse portfolio across Australia, finds itself under regulatory scrutiny following an application lodged with the Takeovers Panel. The application, submitted by a group including Grant David Jopling and others, raises serious questions about the conduct of two of Duxton Farms’ largest shareholders, Richard Magides and Edouard Peter, who collectively hold nearly 59% of the company’s voting power.

Central to the dispute is a merger proposal announced in June 2025, involving Duxton Farms and four unlisted entities linked to Magides and Peter. This merger, coupled with a conditional share placement, has triggered concerns about the transparency and fairness of the transaction, particularly regarding the valuation and the potential dilution of minority shareholders’ interests.

Allegations and Legal Concerns

The applicants contend that Magides and Peter have an undisclosed association that enabled them to amass a controlling stake without launching a formal takeover bid, potentially breaching section 606 of the Corporations Act which governs substantial acquisitions. They argue that acquisitions made outside the so-called 'creep rule' were not properly disclosed, violating disclosure obligations under section 671B.

Moreover, the merger is alleged to be significantly overvalued, effectively transferring value from minority shareholders to the controlling parties. This raises questions about the fairness of the transaction and whether it serves the broader shareholder base or primarily benefits the insiders.

Implications for Upcoming Shareholder Meeting

In light of these allegations, the applicants have sought interim orders to adjourn the extraordinary general meeting (EGM) scheduled for 10 October 2025, where shareholders are expected to vote on the merger and placement resolutions. They also seek to restrain Magides, Peter, and their associates from voting their shares on key resolutions, aiming to prevent any potential undue influence on the outcome.

Final orders requested include corrective disclosures about the association between the major shareholders, the alleged breaches of takeover provisions, and the terms of the placement. Additionally, the applicants want shares acquired in breach of the law to be vested in the Australian Securities and Investments Commission (ASIC) for sale, and restrictions placed on further share dealings by Magides and Peter.

Regulatory and Market Outlook

The Takeovers Panel has yet to appoint a sitting panel or decide whether to conduct proceedings, and it has refrained from commenting on the merits of the application. However, the case highlights the delicate balance between major shareholder influence and minority shareholder protections in listed companies, especially in sectors like agricultural investment where asset valuations can be complex.

Investors and market watchers will be closely monitoring the Panel’s response, as its decision could set important precedents for disclosure and control transactions in the ASX market. The outcome may also influence Duxton Farms’ strategic direction and shareholder confidence in the near term.