The Australian Takeovers Panel .

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The Australian Takeovers Panel. Alan Shaw Counsel Takeovers Panel AMEC seminar Sao Paulo Brazil 9 December 2009. Topics. Background on the Australian market Takeovers Panel structure Takeovers Panel powers Takeovers Panel process Takeovers Panel matters Challenges to the Panel
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The Australian Takeovers Panel Alan Shaw Counsel Takeovers Panel AMEC workshop Sao Paulo Brazil 9 December 2009

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Topics Background on the Australian market Takeovers Panel structure Takeovers Panel powers Takeovers Panel prepare Takeovers Panel matters Challenges to the Panel International correlation

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Part 1 Background on the Australian market

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Market outline 1.7 million enrolled organizations Stock trades ASX - Australian Securities Exchange 2,198 recorded organizations A$1.09 trillion (US$981 billion) showcase capitalisation NSX - National Stock Exchange and Bendigo Stock Exchange 88 recorded Small to Medium Enterprises APX - Asia Pacific Exchange 1 recorded organization

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Degrees of control in Australian law Source: Blake Dawson 2009

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Ways to procure control of an open organization Takeover Scheme of Arrangement TARGET COMPANY Chapter 6 Part 5.1 of section 5 Item 7 of Section 611 Part 2J.1 of part 2 Selective Reduction of Capital Shareholder Approval Source: Blake Dawson 2009

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The Takeovers Code - diagram Set out in Chapter 6 of the Corporations Act Prescriptive legitimate standards - obtaining of control of Australian open organizations and recorded oversaw speculation plans Rules depend on 5 standards – incorporates \'Eggleston standards\' in s602 Rules are tempered in two ways: ASIC can change the law (s655A) The Panel can make revelations of "inadmissible conditions" (s657A) ASIC and the Panel have respect to s602

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The Takeovers Code - preclusion CSLRC: " a reasonable discretionary level missing the mark concerning the probability of genuine control" Not an edge General restriction on gaining more than 20% of an organization/plot (s606) The exchange is not invalid if ruptured (s607) The individual who makes the securing confers an offense (s1311) Penalty: 25 punishment units/6 months or both Specific portals to expanding property above 20% Disclosure Notes 1: Section 9 characterizes organization as importance an organization enlisted under this Act. 2: Section 608 and 609 manage the significance of pertinent intrigue . 3. Area 610 manages the computation of a man\'s voting power in an organization.

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The Takeovers Code – the portals Exceptions to the 20% preclusion (s611) Bids - advertise or off-market (thing 1) Schemes of game plan (thing 17) Shareholder affirmed exchanges (thing 7) 3% crawl (thing 9) Other special cases – rights issues, purchase backs, endorsing and so forth

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The Takeovers Code – divulgence Bidder\'s announcement (area 636) Identity of bidder Details of goals for target (counting future job) Funding of offer Prospectus data if offers offered Details of thought paid in most recent 4 months Any other data material to shareholder\'s choice, unless absurd in light of the fact that already unveiled Target\'s announcement (segment 638) All data shareholders and counselors sensibly require to make an educated appraisal of the offer, to the degree it is known and anticipated that would be discovered Recommendation of every executive

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Takeover or plan? Source: Blake Dawson 2009

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Control exchanges – this year to a year ago Source: Freehills 2009 Public Mergers & Acquisitions Report

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Control exchanges in 2009 - industry sort Source: Freehills 2009 Public Mergers & Acquisitions Report

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Market estimation of arrangements - 2009 Source: Freehills 2009 Public Mergers & Acquisitions Report

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Type of thought - 2009 Shares Cash/Shares Source: Freehills 2009 Public Mergers & Acquisitions Report

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Indicative takeover timetable (1 month offer reached out for 1 month) Preparation for Offer open for acknowledgment Bidder pays thought Give target\'s announcement to ASIC, bidder, ASX, shareholders DAY: 1 15 30 35 46 66 74 95 118 Announce Bid Dispatch bidder\'s announcement to shareholders Offer closes, unless broadened Offer closes, unless further expanded Finish paying thought Compulsory obtaining Give bidder\'s announcement to ASIC, target, ASX Waive or fulfill offer conditions Pay thought Source: Blake Dawson 2009

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Time for fruition of takeovers - 2009 Source: Freehills 2009 Public Mergers & Acquisitions Report

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Regulatory inclusion - 2009 2008 – 12% Source: Freehills 2009 Public Mergers & Acquisitions Report

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Part 2 Takeovers Panel structure

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Panel rationality Peer survey body Regulator of takeovers and other control exchanges Main gathering for determining debate in takeovers Courts barred amid offer period " Sensible, very qualified business individuals settling on business choices in a climate that calls for rapid determination ": Alinta

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Pros and Cons Pros Commercial question determination Principles based Informal process Enforceable in court Speedy hearings Not prevent offer from continuing Cons Acceptance of model Some restrictions on examinations Extra-legitimate contemplations

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Qualifications for Panel individuals Australian Securities and Investments Commission Act Section 172 Not under 5 individuals One part to go about as President Appointed by Governor in Council for up to 5 years May be full time or low maintenance Qualified by reason of involvement in - (a) business (b) administration of organizations (c) financial markets (d) financial items and budgetary administrations (e) law (f) economics or (g) accounting

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Panel individuals – by calling

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Panel individuals – by area

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Panel association Treasury PANEL President 51 individuals (low maintenance ) Counsel Alan Shaw Director Allan Bulman Manager Karolina Danger Legal Officer Nirangjan Nagarajah Assistant Rebecca Banhelyi Secondee Marissa Bendyk Change at regular intervals

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The Executive\'s part Does Does not Assist Panel individuals to make great (reliable and convenient) choices Provide non-restricting exhortation on applications Interfaces with the gatherings on applications Organizes Panel days and different correspondences Draft strategy as settled by more extensive Panel Make choices on applications Exercise any formal forces Exercise any discretions

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Part 3 Takeovers Panel powers

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Panel powers - diagram ASIC audit in connection to adjustments/exclusions from Chapter 6 (Section 656A) Declaration of inadmissible conditions (Section 657A) Orders (Interim and Final) (Section 657D) Referrals to and remittals from court (Sections 657EB and 659A) Rule making (Section 658C) Policy improvement Procedural tenets Guidance Notes

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Other forces Accept enforceable endeavors (ASIC Act segment 201A) Conduct meetings (ASIC regs 35-41) At a meeting - summons witnesses, promise, subpoena records (ASIC Act segment 192) Contempt control (ASIC Act segment 200) Dismiss silly & vexatious applications (Section 658A) Also control not to lead procedures (ASIC reg 20)

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Main power – assertions Corporations Act Section 657A(1) The Panel may pronounce conditions in connection to the undertakings of an organization to be unsuitable conditions. Without restricting this, the Panel may pronounce conditions to be inadmissible conditions regardless of whether the conditions constitute a repudiation of an arrangement of this Act. Fluffy law (vibe) Principles based

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Main power – Bases for presentation Section 657A(2) Appears to the Panel that conditions are inadmissible having respect to control impact generally unsuitable having respect to area 602 in light of the fact that they constitute a repudiation \'Eggleston standards\'

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Purposes of the takeovers code Australian organization - recorded, unlisted with more than 50 individuals, oversaw venture plot \'Eggleston standards\' Section 602: securing of control of voting shares happens in an effective, focused and educated market holders of shares and chiefs: (i) know the personality of any individual who proposes to get a generous premium (ii) have a sensible time to consider the proposition (iii) are sufficiently given data to empower them to survey the benefits of the proposition holders of shares all have a sensible and equivalent chance to take an interest in any advantages

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Chapter 6 approach in applications

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Panel orders Interim requests (segment 657E) Final requests (segment 657D) Declaration of unsatisfactory conditions Not unjustifiably preference any individual Protect rights or enthusiasm of people or gathering of people Ensure the takeover or proposition continues (quite far) as though the conditions had not happened

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Part 4 Takeovers Panel handle

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Panel procedures ASIC PANEL REVIEW PANEL COURTS ASIC allows or denies alleviation Panel concedes or rejects help Questions of law, legal audit "grounds" Appeal Judicial audit Questions of law Remittals ASIC or any "person affected" Declare inadmissible conditions Declare unsatisfactory conditions Application Appeal Source: Blake Dawson 2009

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Panel prepare Procedural guidelines Media campaigning and secrecy Legal representation Applications Choosing three Panel individuals for a matter – clashes Process letter/Declaration of premiums Conduct procedures? Brief, accommodation, answers Conferences Decision, reasons and media discharges

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Part 5 Takeovers Panel matters

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Panel matters s657A s656A

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Panel candidates

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Panel dealings

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Part 6 Challenges to the Panel

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Panel challenges Declaration control Glencore International AG v Takeovers Panel 1 Orders control CEMEX v Takeovers Panel 2 Existence of the Panel itself Precision Data v Wills 3 A-G (Cth) v Alinta 4 Section 657A Section 657D Judicial power Notes: 1. [2005] FCA 1290, [2006] FCA 274 2. [2008] FCA 1572, [2009] FCAFC 78 3.

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