The proposed revisions to the Takeovers Panel’s guidance on funding arrangements for bids seek to ensure there is no confusion following the recent decision of the Federal Court in Australian Securities and Investments Commission v Mariner Corporation Limited.

The Takeovers Panel has released a Consultation Paper seeking public comment on a revised Guidance Note 14 (GN 14).  GN 14 focuses on the effect on target shareholders and the broader market of a bid being announced or made without funding arrangements for the cash component of the consideration being sufficiently in place. 

The aim of the revisions is to ensure that GN 14 does not cause confusion following the decision of the Federal Court in Australian Securities and Investments Commission v Mariner Corporation Limited [2015] FCA 589, with the Panel clarifying the policy basis for GN 14 as being:

  • the acquisition of control over voting shares must take place in an efficient, competitive and informed market (section 602(a) of the Corporations Act 2001 (Cth) (Act)); and
  • shareholders and directors must be given enough information to enable them to assess the merits of a proposal (section 602(b)(iii) of the Act).

The revisions also update references to ASIC's Regulatory Guide 9 Takeover bids.