20 Aug 2008

Changes mooted in Takeovers Code

8:05 am on 20 August 2008

Takeovers are expected to come back into vogue if the Government accepts proposed law changes governing ownership changes for companies.

The Takeovers Panel wants to tighten the rules and minimise takeovers that sidestep the Takeovers Code.

It's recommending the Government require bidders to get either its approval or the court's, before allowing ownership changes by schemes of arrangement under the Companies Act.

At present, bidders can gain control of a company by a scheme of arrangement that requires 75% shareholder approval, rather than the 90% approval required by a takeover.

If accepted, Minter Ellison Rudd Watts' corporate partner Paul Foley says the changes will make takeovers via the code more popular.

The Takeovers Panel reviewed its position after it became concerned by a number of takeovers that bypassed tougher hurdles set down by the Code, saying investors interests were not being properly protected.

The panel says its recommendation provides certainty and flexiblity for bidders, and provides greater protection for investors.