Article by Rodd Levy, Robert Feiner and Sheena Loi
A recent independent market survey of the Takeovers Panel’s role and performance in its first six years of operation has found that a majority of stakeholders consider that the Panel is an effective vehicle for resolving takeover disputes.
The Panel commissioned Chant Link & Associates to conduct the market research with a range of stakeholders in the takeovers markets. Stakeholders surveyed included lawyers, fund managers, investment bankers, regulators and other parties participating in the Panel’s processes.
The survey focused on whether the Panel was achieving its original objectives. These objectives were to reduce tactical litigation in takeovers, reduce the costs of takeovers and to support the purposes of the takeovers legislation—the Eggleston principles.
The vast majority of interviewees viewed the Panel as an efficient and competent regulator. In particular, respondents generally regarded the Panel as:
professionally run—with the use of part-time professionals as Panel members an effective arrangement
pragmatic—with faster resolution of disputes than was possible under the previous court system, and
following principles designed to ensure equity and fairness for shareholders in takeover situations.
A number of stakeholders considered that the overall standards in disclosure in takeovers had improved.
First, bidders did not want to be subject to disputation and Panel involvement, particularly in light of the associated costs and potential delays.
Second, those involved as parties to a Panel proceeding were sources of advice to other professionals in their firms about the likely stance that the Panel would take if their takeover documentation was scrutinised by the Panel.
Areas for Improvement
While the respondents’ views on the Panel were largely positive, certain areas of concern and for improvement were also raised. These included:
the selection of members of the Panel—although the current Panel members were generally considered to be doing a good job, some respondents felt that the process of selecting members was not transparent or based on merit
the under-resourced nature of the Panel, especially in peak times for takeover activity
the unduly high influence that the Panel executive may play in guiding Panel members to decisions and issues, given that Panel members are part-time, and
the need for more policy development in the form of guidance notes, in order to facilitate further consistency and predictability surrounding decisions in the future.
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