Governance
While hostile takeover bids remain rare in Australia, aggressive tactics in approaches are on the rise.
On 1 October 2026, the AICD published an article providing directors with takeaways amidst the rise of ‘hostile tactics’ in takeovers. The AICD reports that tactics such as obtaining pre-bid stakes, leveraging support from a significant target shareholder or threatening to publicly disclose non-binding indicative offers are being increasingly used by bidders to pressure target boards to engage with an offer. According to the article, true hostile bids (that is, made directly to shareholders without the target board’s blessing) remain uncommon, with only three such bids made in Australia last year. For target boards, being prepared for a takeover scenario involves having a clear idea of the company’s valuation and having financial, legal and communications advisers lined up with conflicts cleared. This allows boards to make tactical calls (such as whether to disclose an approach at all and the extent to which due diligence should be granted) in a well-informed manner on their merits rather than under time pressure.
Regulatory
Shareholder approval for scrip-funded takeovers or mergers will be required for S&P/ASX 300 entities from 21 October 2026, subject to completion of statutory processes.
On 23 September 2026, ASX confirmed that its amended Listing Rules and Guidance Notes (as discussed in a previous edition of Boardroom Brief ) will come into effect on 21 October 2026, subject to completion of the statutory processes. From the commencement date of the amended Listing Rules, the 25% cap on the scrip that can be issued in a regulated takeover or merger without shareholder approval (under Listing Rule 7.2 Exceptions 6 and 7) will apply to for S&P/ASX 300 entities, with index status tested on the date the transaction is announced. Boards of entities in or approaching the S&P/ASX 300 that are planning scrip-funded transactions may seek approval for a higher prescribed threshold at a company’s general meeting. They should also build bidder shareholder approval into transaction planning where the scrip consideration is likely to exceed the threshold.
Legal
Panel makes declaration of unacceptable circumstances in relation to the affairs of DGR.
On 28 September 2026, the Panel declared unacceptable circumstances in relation to the affairs of DGR. As discussed in a previous edition of Boardroom Brief, the application alleged deficient substantial holder disclosure by Tenstar Trading Limited (Tenstar), a substantial holder of DGR, and an undisclosed association between Samuel Holdings Pty Ltd (Samuel) (another substantial shareholder in DGR and an entity associated with DGR’s managing director) and Tenstar.The Panel noted that the individuals who had the capacity to direct Tenstar and Samuel to acquire and dispose of DGR shares had been known to each other for more than 25 years, and that Tenstar and Samuel had a history of common investments and dealings. Given this, the Panel found that Tenstar and Samuel were associates acting in concert to acquire DGR shares and had 45.43% voting power in DGR. The Panel found that Tenstar and Samuel had contravened the Corporations Act 2001 (Cth):
- Tenstar and Samuel contravened section 606 by acquiring relevant interests in DGR shares by acting in concert and subsequently acquiring further shares off-market;
- Samuel contravened section 606 by entering into a funding agreement which gave Samuel power or control over the disposal of the DGR shares acquired by the lender;
- Tenstar and Samuel contravened section 671B by providing deficient substantial holder notices to DGR; and
- Tenstar contravened section 672B by failing to comply with a disclosure direction issued by DGR.
The Panel is still considering whether to make final orders and has not yet published reasons for its decision. On 30 September 2026, the Panel made further interim orders restraining dealings in DGR shares. Directors should note that the Panel can infer association from longstanding personal relationships or patterns from shared investment histories, and that director involvement in arranging trades in a company's shares may come under scrutiny and should always be well-documented.
Over the Horizon
RBA increases cash rate to 4.60% amid above-target inflation.
On 29 September 2026, the Reserve Bank of Australia’s (RBA) Monetary Policy Board increased the cash rate target by 25 basis points to 4.60%, its highest level since late 2011. RBA Governor, Ms Michele Bullock, reiterated that higher interest rates are needed to ensure inflation returns to target. A statement by the Monetary Policy Board notes that upside risks previously flagged by the RBA are materialising, such as high global energy prices (with prices much higher than had been assumed in August), increasing prices for technology-related goods and constraints on domestic capacity. As this is the RBA’s fourth rate rise this year and inflation expectations remain relevant, boards should continue to check assumptions about leverage and refinancing risk. For organisations with strong balance sheets, distressed asset sales by over-geared competitors may create acquisition opportunities. The RBA’s next cash rate announcement is scheduled for 3 November 2026, with the major banks currently split over whether the rate will be held or increased further.