Corporate, Mergers & Acquisitions
FocusPapers in the area of Corporate, Mergers & Acquisitions.
A Review of ASIC Relief from Financial Reporting Obligations
17 October 2008
Author: David P. Selig, Partner and Nathan Greenfield, Solicitor
Practice area: Corporate, Mergers & Acquisitions
The Australian Securities & Investments Commission has this month released Regulatory Guide 43 in relation to obtaining relief from financial reporting obligations under the Corporations Act 2001 (Cth).
Milestone Agreement Set to Increase Access to US Capital Markets
3 September 2008
Author: David P. Selig, Partner and Nathan Greenfield, Solicitor
Practice area: Corporate, Mergers & Acquisitions
On 25 August 2008, the Australian Securities & Investments Commission ("ASIC") together with the Australian Minister for Superannuation and Corporate Law, executed a Mutual Recognition Arrangement ("MRA") with ASIC's US counterpart, the United States Securities and Exchange Commission ("SEC"). The MRA is expected to significantly reduce requirements for Australian entities wishing to offer securities to US investors. The agreement follows similar agreements that Australia has signed with New Zealand and Hong Kong authorities that are intended to establish closer links with their respective financial markets.
ASX Review Highlights Need for Prompt Disclosure of Directors' Interests
4 August 2008
Author: David Selig, Partner and Nathan Greenfield, Solicitor
Practice area: Corporate, Mergers & Acquisitions
The Australian Securities Exchange has recently released its findings of a review conducted by ASX Markets Supervision of disclosure of directors' interest notices lodged by listed entities. The Review was conducted over the period commencing 1 January and ending on 31 March 2008.
ASIC Issues New Class Order and Regulatory Guide on Accelerated Rights Issues
11 July 2008
Author: David P. Selig, Partner and Nathan Greenfield, Solicitor
Practice area: Corporate, Mergers & Acquisitions
The Australian Securities & Investments Commission has recently issued Class Order 08/35 ("Class Order") and Regulatory Guide 189 in relation to disclosure relief for accelerated rights issues. The relief is intended to allow entities to raise funds more quickly than by way of traditional rights issues and without requiring a prospectus or product disclosure statement.
Determine Takeover Premiums as You Will, But Make Sure You Explain Why
7 July 2008
Author: David P. Selig, Partner and Renee Shipp, Senior Associate
Practice area: Corporate, Mergers & Acquisitions
The Takeovers Panel has recently handed down another decision in InterMet Resources Limited [2008] ATP 17 which, consistent with its previous decisions in Programmed Maintenance Services Limited 02 [2008] ATP 9 and Magna Pacific (Holdings) Limited [2007] ATP 02, confirms the Panel's view that bidders and targets should not be limited in the ways in which they calculate premiums implied by takeover offers. The Panel confirmed that it will leave bidders and targets free to calculate premiums using share prices at different times and by using different valuation methodologies (such as a VWAP compared with a quoted price on a single day) provided that where comparisons are made on a basis that is not 'like for like', an explanation of why a particular valuation methodology was chosen must be given.
Australia - New Zealand Mutual Recognition of Securities Regime Comes into Force
30 June 2008
Author: David P. Selig, Partner
Practice area: Corporate, Mergers & Acquisitions
On 10 October 2007, Addisons reported on proposed amendments to the Corporations Act 2001 (Cth) ("Corporations Act") dealing with mutual recognition of securities offerings between Australia and New Zealand. Those amendments recently came into force enabling Australian and New Zealand issuers to take advantage of reduced regulatory requirements when issuing securities across the Tasman.
Australian Competition Regulator Comments on New Predatory Pricing Prohibition: Trade Practices Act 1974 (s 461AA)
17 January 2008
Author: Graham Maher, Partner and Kathryn Edghill, Partner
Practice areas: Corporate, Mergers & Acquisitions and Competition, Trade Practices & Regulatory
With effect from 25 September 2007 the Australian Trade Practices Act was amended, among other matters, to include, in the context of the prohibition on misuse of market power, a specific provision prohibiting predatory pricing. The expressed purpose of the new provision is to "specifically target(ing) anticompetitive below-cost pricing by corporations with a substantial market share". Recently, in the context of its Report into the price of unleaded petrol in Australia the Australian Competition and Consumer Commission discussed the new provision and proffered some preliminary guidance as to its likely interpretation.
Federal Court Delivers Decision on "Naked No Vote" Break Fees
16 January 2008
Author: David P. Selig
Practice area: Corporate, Mergers & Acquisitions
On 10 December 2007, the Federal Court in Bolnisi Gold NL (No 2) [2007] FCA 2078 delivered a judgment which provides guidance on "naked no vote" break fee provisions in the context of takeovers and schemes of arrangement. A "naked no vote" break fee is a break fee which is payable by a target to a bidder where the takeover or scheme is rejected by the target's shareholders, despite the absence of any competing offer from another bidder.
Share Valuations - Your minority shareholding may be worth more than you thought!
14 January 2008
Author: Philip Stern, Partner
Practice area: Corporate, Mergers & Acquisitions
It has been the view of many valuers of shares that "fair value" of shares means that the share of a minority shareholder must be discounted because of an inability to control meeting resolutions. In fact a premium for the worth of the minority shares may be appropriate. The Victorian Court of Appeal in Toll (FHL) Pty Ltd v Prixcar Services Pty Ltd [2007] VSCA 285, 10 December 2007 found that "fair value" did not of itself equate to "market value". A premium may attach to a minority shareholding because of a strategic significance in "blocking" resolutions, and potentially because of the ability of a minority shareholder to enter into a relationship of mutual cooperation with a larger shareholder(s). Persons may pay more to avoid the nuisance of a minority investor, particularly if attenuated by greenmail. There is a special value to be placed potentially to an acquirer getting 100 percent of a company (or close) and not have to deal with a third party investor.
Takeovers Panel Reissues Guidance Note on Lock-up Devices
28 November 2007
Author: David P. Selig
Practice area: Corporate, Mergers & Acquisitions
On 13 November 2007, the Takeovers Panel ("Panel") reissued Guidance Note 7 regarding its approach to lock-up devices in control transactions ("Guidance Notice"). Lock-up devices refer to arrangements entered into by targets to encourage or facilitate a takeover bid and include arrangements such as break fees, asset lock-ups, no-talk agreements and no-shop agreements. Whilst the Panel's guidance notes are not binding, they provide guidance as to when the Panel is likely to make a declaration of "unacceptable circumstances" pursuant to section 657A of the Corporations Act 2001 (Cth) ("Act").
Transfers of shares in un-listed companies - to be or not to be?
2 November 2007
Author: Philip Stern, Partner
Practice area: Corporate, Mergers & Acquisitions
It is vital that the requirements for a valid transfer of shares in an un-listed company are complied with. Otherwise, the validity of ongoing resolutions passed by a company may be challenged, and those who believed themselves to be shareholders may find they lack the voting and dividend rights they thought they had. In the recent decisions of Ku v Song [2007] FCA 1189 and Beck v Tuckey [2007] NSWSC 1065, these requirements were considered.
Foreign Entities wishing to List on the Australian Securities Exchange
10 October 2007
Author: David P. Selig, Partner
Practice area: Corporate, Mergers & Acquisitions
Subject to meeting certain requirements under the Corporations Act 2001 (Cth) and the Listing Rules of ASX Limited (ACN 008 624 691), foreign entities may list on the Australian Securities Exchange ("ASX").
Australia and New Zealand - Mutual Recognition of Securities Offerings
10 October 2007
Author: David P. Selig, Partner
Practice area: Corporate, Mergers & Acquisitions
The Corporations (NZ Closer Economic Relations) and other Legislation Amendment Act 2007 (Amending Act) is proposed to come into force on 21 December 2007, if not proclaimed sooner. The Amending Act will insert a new Chapter 8 into the Corporations Act 2001 (Cth) dealing with mutual recognition of securities offerings. The following is a summary of the new provisions of the Corporations Act which will become operative once the Amending Act comes into force.
Important Amendments to the Corporation Act - Corporations Legislation Amendment (Simpler Regulatory System) Act 2007 receives Royal Assent
6 July 2007
Author: David P. Selig, Partner
Practice area: Corporate, Mergers & Acquisitions
On 28 June 2007, the Corporations Legislation Amendment (Simpler Regulatory System) Act 2007 ('Amending Act') received royal assent bringing into effect a number of important provisions which amend the Corporations Act 2001 (Cth).
Chairman of a Company Board - Why take it on?
9 February 2007
Author: Philip Stern, Partner
Practice area: Corporate, Mergers & Acquisitions
Following the comments by Justices Austin and White in ASIC v Rich (2003) 44 ACSR 341 and (2004) 50 ACSR 500 in Greaves case ('Greaves') the expectations of the corporate community relating to the duties and obligations of a non-executive company chairman became uncertain. The background of the case and its potential consequences on company chairmen are set out below.