AUSTRALIA: ASIC enforces standards in Australia takeovers

Tuesday July 9 2013

The ASIC has today announced that an intervention has taken place in transactions deciding the control of two companies, Laneway Resources Limited (Laneway) and PR Finance Group Limited (PR Finance). ASIC has highlighted these actions to enhance the accessibility and transparency of the recently consolidated regulatory guidance on Australia takeovers.

ASIC raised concerns that an entitlement offer by Laneway Resources was an abuse of the rights issue and underwriting exceptions under the law. Under the arrangements, related entities could potentially control up to 86.45% of the voting shares in Laneway largely by, in effect, converting a debt owed to the entities to equity. Following complaints to the Takeovers Panel, Laneway announced that it would withdraw its offer. The Takeovers Panel agreed that the entitlement offer did give rise to unacceptable circumstances.

Concerns were also raised by ASIC regarding an acquisition by Keybridge Capital Limited of PR Finance. ASIC noted that audited accounts had not been lodged ahead of the shareholder meeting as promised in the scheme booklet and shareholders did not have all information they needed to decide the future of the company. The Federal Court agreed with ASIC that the audited financial accounts were material information to investors, and adjourned final approval of the scheme of arrangement to allow lodgement of the accounts, further disclosure and further shareholder consideration.

Please click on the above link for the ASIC press release.