Market Feedback Gives Takeovers Panel A Positive Report.

Article by Rodd Levy, Robert Feiner and Sheena Loi

A recent independent market survey of the Takeovers Panel's role and performance in its first six years of operation has found that a majority of stakeholders consider that the Panel is an effective vehicle for resolving takeover disputes.

The Panel commissioned Chant Link & Associates to conduct the market research with a range of stakeholders in the takeovers markets. Stakeholders surveyed included lawyers, fund managers, investment bankers, regulators and other parties participating in the Panel's processes.

The survey focused on whether the Panel was achieving its original objectives. These objectives were to reduce tactical litigation in takeovers, reduce the costs of takeovers and to support the purposes of the takeovers legislation--the Eggleston principles.

Key Findings

The vast majority of interviewees viewed the Panel as an efficient and competent regulator. In particular, respondents generally regarded the Panel as:

professionally run--with the use of part-time professionals as Panel members an effective arrangement

pragmatic--with faster resolution of disputes than was possible under the previous court system, and

following principles designed to ensure equity and fairness for shareholders in takeover situations.

A number of stakeholders considered that the overall standards in disclosure in takeovers had improved.

First, bidders did not want to be subject to disputation and Panel involvement, particularly in light of the associated costs and potential delays.

Second, those involved as parties to a Panel proceeding were sources of advice to other professionals in their firms about the likely stance that the Panel would take if their takeover documentation was scrutinised by the Panel.

Areas for Improvement

While the respondents' views on the Panel were largely positive, certain areas of concern and for improvement were also raised. These included:

the selection of members of the Panel--although the current Panel members were generally considered to be doing a good job, some respondents felt that the process of selecting members was not transparent or based on merit

the under-resourced nature of the Panel, especially in peak times for takeover activity

the unduly high influence that the Panel executive may play in guiding Panel members to decisions and issues, given that Panel members are part-time, and

the need for more policy development in the form of guidance notes, in order to facilitate further consistency and predictability surrounding decisions in the future.

A copy of the report is available on the Panel's website at www.takeovers.gov.au.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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