New regulations are being introduced with effect from 1 December 2012 in relation to unsolicited "predatory" share offers.
Lowball offers are unsolicited approaches to shareholders offering to buy their shares or other securities for less than the market price. Such offers often contain little information and put pressure on their target audience to sell. Commerce Minister Craig Foss stated that: "Predatory or lowball offers damage the health of our capital markets."
The new regulations govern how unsolicited offers can be made. To protect shareholders from misleading offers, anyone who makes such an offer will have greater disclosure requirements which will include requirements that such offers:
- Satisfy minimum information requirements, including stating the market price or a fair estimate of the value of the shares
- Specify a minimum offer period and a cancellation period.
A person who does not comply with an order made by the Financial Markets Authority commits an offence and is liable on summary conviction to a fine not exceeding $30,000.
The regulations can be found here.