3rd April 2013
FIRB policy changes for 2013
The FIRB has released its policy for 2013, which contains two important substantive changes relating to government-related entities and the types of investments by them that require approval.
Capital Markets
15th March 2013
ASX formalises timetable for fast-track listing process and simplifies the application process for standard waivers
By Peter Cook, Rachael Bassil, Sarah Duerdoth
ASX has formalised its timetable for fast-track listing applications for IPOs using a pathfinder prospectus or PDS. The timetable is consistent with the ASX’s current approach to assessing listing applications in the context of up-front bookbuild structures.
28th February 2013
A get out of jail free card – the reliance of Cathay Fortune on bid conditions to pull the pin on the takeover of Discovery Metals
After a prolonged period of uncertainty for shareholders and the market, Cathay Fortune Investment Limited has walked away from its A$830 million hostile takeover bid for emerging copper developer Discovery Metals Limited and the aftermath has been anything but quiet. Both bidder and target have urged ASIC to put on its agenda the improvement of policies regarding disclosure during takeover bids. The Chairman of Discovery Metals Limited has also asked for a policy position on the use of “self-defeating” bid conditions.
28th February 2013
Creditors’ schemes in the hot seat: the Nine Creditors’ Scheme of Arrangement
By David Clee, Rachel Launders, Andrew Whittingham
The decision of the Federal Court in Nine Entertainment Group Limited, in the matter of Nine Entertainment Group Limited (No 1) [2012] FCA 1464 put to rest any doubt that it is possible to use a creditors’ scheme of arrangement to effect a reconstruction by a debt to equity swap.
28th February 2013
M+A Perspectives – February 2013
In this month’s edition we look at the decision of the Federal Court in Nine Entertainment Group Limited, in the matter of Nine Entertainment Group Limited (No 1) [2012] FCA 1464 and Cathay Fortune to pull the pin on the takeover of Discovery Metals.
31st January 2013
The Panel confirms the role of a “bare trustee”
By Sarah Turner, Jessica Karasinski
Knights Capital Group Limited’s application to the Takeovers Panel alleged that a significant shareholder’s actions in seeking to remove and appoint directors meant that the shareholder was not holding the shares as a bare trustee and therefore could not rely on the section 609(2) “bare trustee” exception to the prohibition in section 606. Having accepted an undertaking from the shareholder, the Panel considered ASIC was best placed to make further enquiries into the shareholder’s role and the bare trustee exemption.
31st January 2013
One size may not fit all: tailoring a recommendation to different investment horizons
By David Clee, Alex Kauye
The approach recently taken by the independent board committee of Engenco Limited in relation to the takeover bid by Elph Pty Ltd is a timely reminder that the recommendation options available to target directors extend beyond the standard yay or nay.
31st January 2013
M+A Perspectives – January 2013
In this month’s edition we look at the approach recently taken by the independent board committee of Engenco Limited in relation to the takeover bid by Elph Pty Ltd and Knights Capital Group Limited’s application to the Takeovers Panel.
3rd October 2012
Austock Group Limited [2012] ATP 12: Panel takes a dim view of unfunded bid
By David Clee
Mariner Corporation Limited (Mariner) announced an intention to make an off-market takeover bid for Austock Group Limited (Austock) on 25 June 2012.
3rd October 2012
Revised reserve and resource disclosure rules: what really lies beneath?
By Matt Baumgurtel, Chris Flynn, Ben Macdonald
On 18 September 2012 the ASX released for public comment proposed changes to the ASX Listing Rules and Guidance Notes relating to Reserve and Resource Disclosure Rules for Mining and Oil & Gas Companies. These changes follow extensive consultation with industry and other key stakeholders and have been released in conjunction with revisions to the JORC Code.
3rd October 2012
Warranty and Indemnity insurance
By Andrew Bullock, Hiroshi Narushima
We provide and update on warranty and indemnity insurance in Australia.
3rd October 2012
M+A Perspectives – September 2012
In this month’s edition we look at warranty and indemnity insurance in Australia, revised reserve and resource disclosure rules and the decision of the Takeovers Panel in Austock Group Limited [2012].
31st August 2012
Experts – not untouchable but respect their expertise
The Takeover Panel’s recent decision in Minemakers Limited 02 ATP 13 shows that, while an independent expert’s report can be challenged through the Takeovers Panel, the expert’s report must be patently incorrect or unreasonable, or the independence of the expert must be compromised, before the Takeovers Panel will intervene. This outcome was confirmed following an application for review.
31st August 2012
Takeover approaches: To disclose or not to disclose
By Neil Pathak, Alex Brown, Roisin Kennedy
Directors in receipt of a confidential takeover approach often face a difficult decision whether to disclose it or not. That decision can have serious ramifications for the company’s share price and media and regulatory scrutiny. The recent trend seems to be towards early disclosure of takeover approaches – we question whether that is actually a good thing for shareholders and also market integrity.
31st August 2012
M+A Perspectives – August 2012
In this month’s edition we examine whether to disclose or not disclose in response to receiving a takeover approach and consider the implications of a recent Takeovers Panel decision for hostile bidders wishing to challenge alleged defects in an independent expert’s report.
31st July 2012
Need for speed: ASX proposes changes to abbreviate the traditional rights issue timetable and provides a leg-up for small cap raisings
By Amy Knox, Adam D'Andreti, Rachael Bassil
As part of its wider package of reforms to the regulation of capital raisings by ASX-listed entities, ASX has announced a proposal to shorten the standard timetable for traditional entitlement offers by up to two weeks, and changes that have the effect of reducing the spread requirements and increasing the ability of small caps to raise capital.
31st July 2012
M+A Perspectives – July 2012
In this month’s edition we pause for a mid-year reflection on the State of the M+A Nation and consider the likely impact on traditional and accelerated rights issues of changes to the traditional rights issue timetable proposed by ASX.
4th July 2012
An overview of greenshoes and market stabilisation in the Australian market
By Rachael Bassil, Adam D'Andreti
Since 1997, post-offer market stabilisation, or, as it is colloquially described, “greenshoes” have been features of large IPOs in Australia. The use of market stabilisation in large offerings remains an important consideration, especially given ongoing volatility in Australian and international capital markets. However, limitations in the Australian regulatory regime make it challenging to adopt stabilisation in anything other than large IPOs. The legal and regulatory issues associated with greenshoes should be understood by anyone contemplating a significant offering or sale.
4th July 2012
Putting your money where your mouth is: is there a case for a “put up or shut up rule” in Australia?
By Andrew Bullock, David Clee, Amy Knox
The recent public tussle between the board of Spotless and Spotless’ suitors at Pacific Equity Partners led to a number of market participants and commentators to call for Australia to strengthen targets’ arms by introducing a form of the UK’s “put up or shut up” rule. So is more regulation required?
4th July 2012
M+A Perspectives – June 2012
This month looks at the UK’s “put up or shut up” rule, an overview of greenshoes and market stabilisation in the Australian market, and the ASX’s consultation process for the reporting requirements for Australian resources companies.
1st June 2012
Stopped from bidding when you didn’t agree to stand still – an interesting US case
A recent decision of the Delaware Court of Chancery, which is the leading US court on company law cases, provides a timely reminder for parties to potential M+A transactions that care needs to be taken in drafting confidentiality agreements to avoid unintended limitations on future conduct.
1st June 2012
Collateral benefits in schemes of arrangements
The recent merger of Whitehaven Coal Limited (Whitehaven) and Aston Resources Limited (Aston) has put collateral benefits in schemes of arrangement back on the radar.
1st June 2012
M+A Perspectives – May 2012
In this month’s edition we consider collateral benefits in schemes of arrangement and a recent US case of interest to prospective hostile bidders.
30th April 2012
Failure to minimise control impact of rights issue receives frosty response from Takeovers Panel
By Kobi Devenish, Rachel Launders
Guidance Note 17 – Rights Issues (GN 17) sets out the approach adopted by the Takeovers Panel (the Panel) in relation to rights issues that have the potential to affect control. The recent decision by the Panel in Real Estate Capital Partners USA Property Trust [2012] ATP 6 (Real Estate Capital Partners), in which a declaration of unacceptable circumstances was made, has confirmed the approach of the Panel as set out in GN 17 and reinforced the need for directors to take all reasonable steps to mitigate the potential control impact of a rights issue.
30th April 2012
Special dividends – sweetening the deal
The payment of special and ordinary dividends prior to completion of public company takeovers has been a common theme in many recent transactions. A significant attraction for shareholders is the opportunity to access franking credits in the target which, in certain circumstances, may not be of significant benefit to an acquirer (eg private equity fund acquirers and non-residents in treaty countries which benefit from low or nil dividend withholding tax rates).
30th April 2012
M+A Perspectives – April 2012
In this month’s edition we consider the benefits of paying a special dividend in the context of a public M&A transaction, and highlight the Takeovers Panel’s continuing interest in rights issues that may have an impact on control.
29th March 2012
Bridging the price gap – the rise of contingent consideration?
Despite the recent improvement in Australian M&A activity, a number of strategically sensible transactions are still not getting done because of the inability of the parties to agree on price. In recognition of these volatile economic times acquirers will often take a conservative approach to placing value on the future performance of a company, while target companies are still trying to achieve the highest value for their shareholders, leading to a potential price gap between the parties.
29th March 2012
We’re the regulators and we’re here to help – capital raising for small to mid cap companies
By Rachel Launders, Jordan Kent
Recent moves by the Australian Securities Exchange (ASX) and the Australian Securities and Investments Commission (ASIC) will make it easier for small to mid cap companies to raise equity.
29th March 2012
Takeovers Panel upholds importance of Truth in Takeovers without chilling the auction in Ludowici Limited
By Peter Cook, Rachael Bassil, Nirangjan Nagarajah
The Takeovers Panel’s recent decisions in the matter involving Ludowici Limited serves as a timely reminder to all takeover participants of the importance of taking care with public statements in relation to a takeover bid or scheme of arrangement.
29th March 2012
M+A Perspectives – March 2012
In this month’s edition we consider the Takeovers Panel’s most recent comments on “Truth in Takeovers” in the context of a live auction, promising signs from ASX and ASIC for fundraising by small to mid cap companies, and recent trends in the use of contingent consideration in control transactions.
29th February 2012
Current developments in Australia’s foreign investment rules
By Kirish Kularajah, Deborah Johns
After two years at $231 million, the standard monetary threshold for notifiable transactions has increased to $244 million. Recent controversy around acquisitions by foreign persons of agricultural land in Australia has once again put Australian foreign investment rules into the spotlight, potentially impacting M&A activity in both the agribusiness and mining sectors.
29th February 2012
Not all pills are poisonous – the Takeovers Panel decision in RCL Group Limited
By David Clee, Alex Kauye
The recent decision of the Takeovers Panel (Panel) in RCL Group Limited (RCL Group) has put “poison pills” back on the radar. In RCL Group, the Panel declined to conduct proceedings in relation to the operation of a contractual right given to Torchlight Real Estate Fund Limited (Torchlight) under the terms of its corporate facility agreement with ASX-listed, RCL Group Limited (RCL).
29th February 2012
Recent trends in hybrid securities and the key legal issues
By Janine Ryan, Adam D'Andreti
There has been a strong resurgence in the hybrid securities market, which had been largely dormant since the onset of the GFC, with a number of recent issues by financial issuers (including ANZ, Westpac and Colonial) and corporate issuers (including Woolworths, Origin Energy, Tabcorp and AGL Energy).
29th February 2012
M+A Perspectives
In this month’s edition we consider the strong resurgence in the hybrid securities market in Australia, recent comments on “poison pills” by the Takeovers Panel and current developments in Australia’s foreign investment rules.
30th November 2011
Material adverse change conditions in an increasingly uncertain world
By David Clee, Kate Merrifield
Recent times have been challenging to say the least.
30th November 2011
ASIC relents on celebrity photo bans and ASX asks for criminal background checks on directors – recent developments affecting companies proposing to list
By Adam D'Andreti, Rosamond Sayer, Ilona Roze
ASIC’s new guidance on prospectus disclosure On 10 November 2011, ASIC released Regulatory Guide 228 Prospectuses: Effective disclosure for retail investors (RG 228) following industry consultation on draft guidance set out in Consultation Paper 155 (CP 155)1. The new regulatory guide contains the most comprehensive guidance provided to date by ASIC on how it will [...]
30th November 2011
Revised ASIC policy on downstream acquisitions: The path is becoming clear but no less treacherous
In our April edition of M&A Perspectives we discussed some recent Takeover Panel cases (eg ACS/Hochtief/Leighton) and some interesting potential transactions (CGNPC Uranium/Kalahari/Extract) concerning downstream acquisitions.
31st October 2011
M+A Perspectives – October 2011
In this month’s edition we consider the state of play in LBO finance markets, recent changes to ASIC’s regulatory guidance on schemes of arrangement and a recent judicial decision which provides guidance on the ability of responsible entities to unilaterally amend scheme constitutions.
31st October 2011
State of play in LBO finance markets
By John Schembri, Hiroshi Narushima
The ongoing fragility of the global economic recovery and credit markets has continued to restrain deal flow in the Australian private equity market in 2011.
31st October 2011
Managed investment schemes update: constitutional amendment power confirmed
By Bob Ker, Adam Laura
The Corporations Act 2001 (Cth) (Corporations Act) permits the responsible entity (RE) of a registered managed investment scheme to unilaterally amend the scheme’s constitution if the RE reasonably considers that the change will not adversely affect members’ rights.
31st October 2011
ASIC updates guidance on schemes of arrangement
On 22 September 2011, ASIC published its revised Regulatory Guide 60 (RG 60) that outlines its approach to schemes, following industry consultation and an internal policy review since the last update in 2009.
30th September 2011
M+A Perspectives – September 2011
In this month’s edition we consider the composition of classes for schemes of arrangement, the recent run of ‘hostile’ bids and issues relating to them and the recently announced changes to the foreign investment approval process for the acquisition of mining exploration projects by SOEs.
30th September 2011
Schemes of Arrangement: the Question of ‘Class’
By Jordan Kent, Rachel Launders
One of the most difficult issues that arises in a scheme of arrangement (whether used to acquire control of a company or to effect a demerger) is the determination of whether any group of shareholders should be treated as a separate class for the purpose of voting on the scheme.
30th September 2011
War then peace: seizing control when playing nice just doesn’t work
By David Clee, Alex Kauye
In recent times, we have seen a number of high profile bids announced without the support of the target company. The most notable of these are the current bids for Macarthur Coal and Foster’s. Traditionally, these have been known as ‘hostile’ bids. However, bidders nowadays are sure to distance their bid from any suggestion of hostility, with public statements focusing on delivering value to target shareholders and emphasising a willingness to work with the target to successfully execute the bid.
30th September 2011
Foreign investment in exploration and development projects – shifting the goal posts for SOEs
By Alex Brown
In a recent press interview the Federal Treasurer, the Honourable Wayne Swan MP, announced a significant departure from the existing policy in respect to the investment by SOEs in Australian mining exploration companies.
31st August 2011
M+A Perspectives – August 2011
In this month’s edition we consider debt funding for takeover bids, commercial and legal issues relating to the recent run of joint bids in Australia and insider trading issues associated with block trades. We also take a look at G+T news and recent deals G+T has been advising on.
31st August 2011
Considering a block trade? When too much information can be a problem
By Adam D'Andreti, Rachael Bassil
The $3.3 billion sale by Royal Dutch Shell of part of its shareholding in Woodside, and the complete exits of Nine Entertainment Co. and the Canadian Pension Plan Investment Board from their investments, respectively, in carsales.com and Transurban, demonstrate that block trades remain a viable option for substantial securityholders who are looking to sell down their investment. In each of those trades, the broker managing the sale also underwrote it.
31st August 2011
Joint bids: a cure for the pre bid jitters?
There is no doubt that M&A transactions are taking longer and are harder to complete these days. The difficulties can arise in many different shapes and forms. Bid funding can be hard to obtain, the perceived risks can be high, regulatory issues can get in the way and significant shareholders may not be sellers. What is the panacea for these problems?
31st August 2011
Debt funding for takeover bids: how certain do the funds need to be?
By John Schembri, Peter Cook, David Clee
A feature of Australian M&A activity in calendar year 2011 has been the comeback of the takeover bid as a preferred means for effecting significant public corporate control transactions.
29th July 2011
The state of the M&A Nation: 2011 mid year report card
Having reached the halfway point for 2011 it is an opportune time to reflect on the year to date and crystal ball gaze into the rest of the year.
