Austar – Panel Publishes Reasons in Austar Application [04/06/2003] The Takeovers Panel

Wednesday, 4 June 2003

PANEL PUBLISHES REASONS IN AUSTAR APPLICATION

The Panel has today published its reasons for declining to make a declaration of unacceptable circumstances in relation to an application by Pondale Properties Pty Limited on 28 February 2003. The Panel announced its decision on 18 March 2003.

The application was in connection with the acquisition by CHAMP SPV Pty Limited and its related entities (CHAMP Group) of a relevant interest of approximately 81% in Austar United Communications Limited. The CHAMP Group acquired the relevant interest in Austar through funding a US Chapter 11 debt restructure of a subsidiary of United Asia/Pacific Communications, Inc.

Pondale alleged that unacceptable circumstances existed because the market was not adequately informed about the ultimate ownership and control of the CHAMP Group. It alleged that the acquisition by the CHAMP Group of a controlling interest in Austar would not take place in an efficient, competitive and informed market.

The Panel declined the application although it considered that the applicant had made out some of its concerns. The Panel believed that those concerns were addressed by additional detailed disclosures by the CHAMP Group during Panel proceedings.

The application raised serious concerns about the issue of applications being made to advance the interests of a person but the identity of that person not being disclosed. Pondale had been instructed to make the application on behalf of another entity, Wattle Park Partners Pty Ltd. Wattle Park was acting on a general retainer from Seven Network Limited. Seven was aware of Pondale's application and its subsequent actions. However, none of these details were disclosed to the Panel at the time the application was made, nor in any public disclosure by Pondale.

The Panel may decline to commence proceedings in future applications where the identity of the person on whose behalf the application is made is not disclosed.

The Panel's reasons for its decision are available on its website at: http://www.takeovers.gov.au

The sitting Panel comprised Nerolie Withnall (sitting President), Alice McCleary and Michael Ashforth.

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