Takeovers Panel – proposed amendments to the Takeovers Code

The Takeovers Panel has recommended to the Minister of Commerce & Consumer Affairs that a number of amendments be made to the Takeovers Code (Code). The proposed amendments in full can be found on the Panel’s website.

The amendments

The key change recommended is the introduction of a monetary threshold below which a company will not be considered a Code Company which has to comply with the Code. At present, a Code Company is one which is listed (or was listed in the last 12 months) or which has 50 or more shareholders and share parcels.

The new monetary threshold will see unlisted companies excluded from the ambit of the Code which, in summary, have:

  • total revenue (together with its subsidiaries) of less than $15 million at the end of the most recently completed accounting period; or
  • total assets (together with its subsidiaries) of less than $30 million at the end of the most recently completed accounting period.

The remainder of the changes recommended are technical in nature and facilitate the more effective operation of the Takeovers Code. For example, provision will be made to allow greater use of electronic communication.

Our view

The proposed amendments will reduce the compliance burdens on a number of currently small Code Companies and will allow the takeover process to run more effectively. While Silvana Schenone, one of our partners, is a member of the Takeovers Panel, we objectively see these as positive amendments that will assist a number of companies, particularly smaller Code Companies which are actively capital raising or crowd funding.

If you have any questions in relation to the proposed amendments or any general Takeovers Code issues or queries, please contact one of our experts.