A public consultation on corporate control transactions has been launched by the federal government in order to improve takeover bids and members’ schemes of arrangement.
Last year, the government suggested that the role of the Takeovers Panel could potentially be expanded to consider and approve schemes of arrangement and give advance rulings.
According to Treasurer Josh Frydenberg, the aim of these potential changes would be to reduce the time and costs involved in mergers and acquisitions.
“The Morrison government is committed to growing our economy as part of our plan for a stronger future. Control transactions play an important role in ensuring Australia’s capital markets remain efficient and competitive,” Mr Frydenberg said in a statement.
The government said that takeover bids overseen by the Takeovers Panel represented 39 per cent of all control transactions in 2021, while the remaining 61 per cent were undertaken via a scheme of arrangement overseen by the court.
As part of the consultation process, Treasury is seeking feedback on the operation of takeovers and schemes in general and whether they are meeting the broader policy objectives in respect of control transactions in Australian law.
Feedback is also being sought on the role of the Takeovers Panel and ASIC in regulating takeovers and the role of the court, the Takeovers Panel, and ASIC in regulating schemes.
Last year, the government committed $3.4 million to the Takeovers Panel over four years to respond to the “significant growth in takeover disputes”.
Based on the feedback received, the government is looking to understand whether schemes used to effect a change in corporate control should continue to be regulated primarily by the court or should instead be regulated primarily by the Takeovers Panel.
Alternatively, a new type of scheme could be created under the takeover rules in chapter 6 of the Corporations Act and be regulated by the Takeovers Panel while chapter 5 schemes would continue to be regulated by the court.
Treasury is also consulting and seeking feedback on whether the Takeovers Panel should be empowered to give advance rulings.
Submissions to the consultation will be accepted by Treasury up until 3 June.
Jon Bragg
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
