Saipem Ltd is a listed company with a growing business and reputation in minerals exploration. Niko Ltd has been interested in Saipem for the last 12 months as its board believe acquiring Saipem would give it a strong position when the Federal Government announces the upcoming "Mineral Resources Subsidy''.

Three months ago, Niko began acquiring Saipems shares and now holds 19.2%. Nikos directors have decided to make an immediate offer of 3 Niko shares plus $1.50 cash to Saipems shareholders. One of the matters Nikosdirectors are worried about is the negative opinion the Saipems board have of Nikos business model. Nikos directors believe the Saipems directors may try to upset their goal of control.

1. (i) What is your view on Nikos offer and what Niko must do to achieve control of Saipem? [5 marks]

2. (ii) Explain whether Saipems directors have the ability to influence Nikos plans and how any such

   action may impact upon their duties as directors. [5 marks]