Panel Publishes Final Guidance on Frustrating Action [16/06/2003] The Takeovers Panel

Monday, 16 June 2003


The Takeovers Panel has today published its Guidance Note on Frustrating Action. The final version follows a draft that the Panel released for public consultation.

The Guidance Note is based on the Panel's view that decisions about control and ownership of a company should be made by its shareholders.

Where a corporate action could frustrate a proposal concerning control or ownership of a company, the Panel will generally require that shareholders be able to determine the control and ownership of the company.

The Panel's approach is based on legislative policy which requires it to examine the effect of conduct on shareholders and markets, rather than subjective factors.

The Guidance Note indicates the Panel's approach when considering actions of the directors of a company that is subject to a takeover offer, where those actions may lead to the offer lapsing, being withdrawn or not proceeding.

The Guidance Note aims to draw a balance between preserving the rights of shareholders and not unduly limiting the conduct of a target's business while a bid is on foot. The Guidance Note makes it clear that the Panel will not support applications by bidders who attempt to exploit the policy.

The Panel has also published on its website a paper that sets out the major external comments that the Panel received on the consultation draft and its response to those comments.

The Panel would like to thank the Frustrating Action Sub-Committee (Robyn Ahern, Tony Burgess, Kathy Farrell, Irene Lee and Marian Micalizzi) for their work.

The Frustrating Action Guidance Note and the Public Consultation Response Statement are available at: - Guidence page - Consultation page

Nigel Morris, Director, Takeovers Panel
Level 47 Nauru House, 80 Collins Street, Melbourne Vic 3000
Ph: +61 3 9655 3501