The Takeovers Panel recently made a declaration of unacceptable circumstances and ordered a substantial shareholder to vote in favour of a scheme of arrangement when the shareholder had disposed of two-thirds of its shares after publishing intention statements that it was in favour of the scheme.
Legal Framework
Entities that have a substantial holding in a company, must, under 671B of the Corporations Act (the Act) notify the ASX and the company within 2 business days every time there is a movement in its holdings of at least 1%.
ASIC regulatory guide 25 ‘false and misleading statements’, addresses ‘truth in takeovers’ and applies to bidders, targets and substantial holders when they depart from a public statement regarding their intentions in relation to a bid. The ‘truth in takeovers’ policy promotes the intention of Chapter 6 of the Act for the acquisition of control to take place in an ‘efficient, competitive and informed market’.
Authors:
Lis Boyce, Partner
Email: lboyce@piperalderman.com.au
Robert Howarth, Law Graduate
Email: rhowarth@piperalderman.com.au