THE Australian Securities and Investments Commission has announced the interim results of its program of reviewing company documents sent to shareholders.
The program aims to improve the disclosure between public company boards and their shareholders.
ASIC has taken action in several cases.
In the case of IT&e Limited ASIC required further information be provided to shareholders about a resolution that sought approval to give a financial benefit to NextSet Software and Parwood Pty Ltd, being companies that would become related parties of IT&e in future.
In particular, further information was obtained in relation to the details of the proposed acquisition of Next Set’s business and the nature of the benefit being given to Parwood.
In Nova Health Limited ASIC required an undertaking from the company that directors involved in underwriting a rights issue would not increase their voting power by more than the 20 per cent takeovers threshold.
In Consolidated Broken Hill Limited ASIC required the company to supply shareholders with an independent expert’s report in relation to a proposal to issue shares over the takeovers threshold. In addition, CBH sent to its shareholders information requesting they make no decision on the proposal until they had considered the supplementary information.
In Fexco Investments Australia Ltd’s bid for Prudential Investment Company of Australia Ltd, ASIC had previously given relief for a joint takeover bid by a bidding vehicle on the basis that the joint bidders would be required to accept a better rival bid if they did not match that bid.
The expert’s report in the target statement concluded that the bid was not fair but was reasonable as a rival bid was extremely unlikely given the shareholding of the joint bidders.
ASIC required the expert’s report to be amended to make it clear that the terms of the relief increased the likelihood of a rival bid.
In that case a rival bid was made and the joint bidders increased their bid price from 35 cents to 57 cents a share.
In beTRUSTed Australia Pty Ltd’s takeover for SecureNet Limited, ASIC required SecureNet to lodge a supplementary target’s statement containing additional disclosure in relation to forward looking statements and reasons for entering into the lock-up agreement with beTRUSTed.
In Tranzact Financial Services Limited, ASIC required Tranzact to supply shareholders with an independent expert’s report in relation to an approval for a proposed acquisition by Tranzact’s major shareholder. Tranzact also agreed to postpone the meeting until shareholders had reasonable opportunities to consider the supplementary information.
