Panel Holds Back ALQ Directors' Bid Payments by Liquorland [17/07/2001] The Takeovers Panel

Tuesday 17 July 2001

PANEL HOLDS BACK ALQ DIRECTORS' BID PAYMENTS BY LIQUORLAND

The Panel has today made an interim order restraining, for 14 days, the payment by Liquorland to the ex-directors of Australian Liquor Group Ltd (ALQ), and their associates, of payment for ALQ shares sold into Liquorland's takeover bid. It made no order concerning the payments to other ALQ shareholders, which are due to commence tomorrow, 18 July, 2001.

The Panel received an application by Liquorland in relation to its bid for ALQ on 12 July, 2001. Liquorland applied for an interim order restraining the payment by it of the bid consideration to all shareholders of ALQ, and for a declaration of unacceptable circumstances and final orders. Liquorland alleged that disclosure by ALQ during Liquorland's bid of its financial performance was inadequate.

The Panel has directed Liquorland to pay the monies owing to the ex-directors and their associates into an interest bearing trust account. The money, and accrued interest, is to be paid out of the account in 14 days, unless otherwise ordered by a court.

The Panel has advised that the "associates" of the ex-directors of ALQ may make submissions, within the next 48 hours, why the consideration for their ALQ shares should be released prior to the 14 days of the interim order.

The Panel decided, on the submissions before it, that it appears likely that unacceptable circumstances existed in relation to the market in ALQ shares for a material portion of 2001, at least. However, those submissions have yet to be fully tested. The Panel considers that the evidence currently before it also suggests that during the first half of 2001, ALQ became aware that the information on which it based revenue and profit statements and forecasts was very likely to be materially unreliable. The current evidence also suggests that the directors of ALQ did not inform the market of this unreliability of its revenue and profit statements in any relevant or timely manner.

The Panel will issue a further brief to parties to the matter asking whether it is in the public interest for it to pursue its proceedings in this matter given the interim orders that it has made. It will seek and consider submissions on this over the next 14 days.

The sitting Panel is Ms Alice McCleary, Mr David Gonski, Ms Carol Buys.

Nigel Morris
Director, Corporations and Securities Panel
Level 47 Nauru House, 80 Collins Street, Melbourne VIC 3000
Ph: +61 3 9655 3501
nigel.morris@takeovers.gov.au