4.3 Takeovers Panel The Takeovers Panel is a specialist tribunal for resolving takeover disputes. It has near-exclusive jurisdiction to hear disputes in relation to a takeover bid, and broad nonexclusive jurisdiction in relation to control transactions and acquisitions of voting securities that do not involve a takeover bid. It also has jurisdiction to hear matters relating to a proposed scheme of arrangement before the courts are involved. The Panel’s objective is to determine takeover disputes in an efficient manner by focusing on commercial and policy issues rather than technical legal points. To this end, the Panel comprises part-time members appointed by the government from the ranks of public company directors, senior investment bankers, academics and lawyers. Each application to the Panel is heard by a sitting Panel of three of those members. The Panel is supported by a full-time executive team. The Panel’s primary power is to declare circumstances unacceptable in relation to a takeover bid for, or the control of, an Australian publicly listed company or trust. The Panel can make such a declaration if it appears to the Panel that the circumstances: • are unacceptable having regard to the effect that the Panel is satisfied that the circumstances have had, are having, will have or are likely to have on:
the control or potential control of a listed company or listed managed investment scheme; or • the acquisition or proposed acquisition of a substantial interest in a listed company; • are otherwise unacceptable having regard to the purposes of the takeovers rules (ie. the fundamental principles in section 1.4); or • are unacceptable because they constitute or are likely to constitute a breach of the black letter takeover rules or the provisions relating to substantial shareholding notices or tracing provisions, and after having regard to the public interest. If the Panel makes a declaration of unacceptable circumstances, it has very broad powers to make orders to protect the rights of persons (especially target security holders) and to ensure that a takeover bid proceeds (as far as possible) in a way that it would have proceeded if the unacceptable circumstances had not occurred. This includes divestment orders and orders affecting the rights of third parties. As with a court, the Panel cannot act of its own accord. It can only make a declaration of unacceptable circumstances in response to an application brought by ASIC or an interested party (eg a target entity, target securityholder, or a competing bidder). However, the similarities to a court end there. Unlike a court, the Panel does not make decisions on the basis of black letter takeovers rules. The Panel is required to, and in practice does, take a purposive approach to the takeovers rules – the upshot being that structures and courses of action which technically avoid the operation of any takeover rule but which may be inconsistent with the fundamental takeovers principles are at risk of being struck down by the Panel. Also, unlike a court the Panel is not bound by rules of evidence, thereby giving the Panel greater flexibility in determining what information it can take into consideration when ruling on an application. Further, unlike a court, virtually all Panel cases are conducted by written submissions and involve a fairly short timetable. The Panel also has the power to review ASIC decisions whether to grant modifications of or relief from the takeovers rules. This power is not commonly exercised,
as relatively few applications for such review have been made to date. The Panel has published a number of guidance notes which discuss the policy the Panel considers relevant in control transactions. Prior Panel decisions (roughly 15-35 each year since the Panel was established in 2000) are also a useful source of guidance. However, it must be noted that, unlike the London Takeover Panel, the Australian Takeovers Panel does not (and does not have the power to) provide upfront binding rulings on whether a proposed course of action complies with the takeovers rules or is immune from a declaration of unacceptable circumstances.
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