AUSTRALIA Trends and Developments Contributed by: Alberto Colla, Keith Tan, Hugh McDonald and Dean Zinn, MinterEllison
Under the reforms, transactions involving the acquisition of shares or assets that meet pre - scribed notification thresholds and other criteria must be notified to Australia’s competition regu - lator, the Australian Competition and Consumer Commission (ACCC). The suspensory nature of the regime prevents parties from closing or tak - ing steps to close a transaction before ACCC clearance has been obtained. Failure to notify and comply with ACCC’s clearance require - ments will void the transaction and may also result in substantial penalties being imposed by the Federal Court of Australia. These reforms significantly alter the process for notifying and engaging with the ACCC and are expected to result in a vast number of transac - tions needing merger clearance that would not typically be notified to the ACCC under the exist - ing voluntary clearance process (eg, large acqui - sitions with no material competitive overlaps). They will also impact many facets of transaction planning, strategy, negotiation and implementa - tion, including with respect to transaction time - lines and the scope of due diligence (and reverse due diligence), which will need to be expanded to assess whether the ACCC needs to be noti - fied of a proposed transaction. Proposal to enhance beneficial ownership disclosure for listed entities In November 2024, the Commonwealth Treasury released a consultation paper, including a draft bill, regarding changes to Chapters 6 and 6C of Australia’s Corporations Act to enhance the substantial holding and tracing notice regimes, which, amongst other things, govern the disclo - sure of beneficial ownership for listed entities. The proposed reforms are intended to, amongst other things, bring equity derivatives into fuller view of the Chapter 6C disclosure regime and
ensure they are captured by other requirements in the Corporations Act that target ‘relevant inter - ests’, require foreign-registered entities listed on Australia’s financial markets and their secu - rity-holders to disclose interests in securities to the same standard as Australian-registered listed entities and their shareholders and confer on ASIC additional powers to incentivise and enforce compliance with the amended disclo - sure regime and to protect market participants. While the proposed reforms represent a step in the right direction to foster a more transparent and accountable corporate environment, as cur - rently drafted, the proposed reforms are viewed by many as controversial as they may result in significant unintended consequences and an enormous compliance burden on market par - ticipants, especially those who trade in equities and derivatives with no control intentions. The requirement to disclose all equity derivatives, including cash-settled derivatives, may flood the market with immaterial disclosures and raise serious privacy concerns. Further, there is an argument that any policy considerations are already being addressed via the Takeovers Panel Guidance Note 20 (GN20), which has, in practice, been an effective tool for requiring dis - closure of aggregate relevant interests and long equity derivatives above 5% as the Panel has the power to make a range of remedial orders to compel compliance with GN 20. Key Market Trends Continuing upward trend in the use of ‘dual track’ schemes and takeover bids The “dual-track” structure remains popular. The dual-track structure typically entails a pro - spective acquirer launching a scheme and a takeover offer concurrently: the takeover offer is priced slightly below the scheme, and it is
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