Government targets predatory share offers

Craig Foss
5 June, 2012

Commerce Minister Craig Foss today welcomed targeted consultation ahead of the introduction of new measures to rein in unsolicited 'predatory' share offers.


"Predatory or low ball offers are not only a risk to those they mislead, they also weaken the trust investors have in our capital markets," says Mr Foss.

Lowball offers are unsolicited approaches to shareholders offering to buy their shares or other securities. The offer letters put pressure on people to sell their shares quickly, often with little information and using unconventional business practices.

The Government has agreed to develop regulations to govern how unsolicited offers can be made, focussing on transparency for security holders.

The proposed regulations will:
•Set out minimum information requirements to enable shareholders to make informed decisions, including stating the market price or a fair estimate.
•Specify the process to manage offers, including a minimum offer period and a cancellation period.
•Set out the rights and available remedies for those approached with unsolicited offers.

The regulations will not prevent unsolicited offers being made, but will provide a comprehensive regulatory framework that will provide certainty to the Financial Markets Authority, and investors.

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 will be in place by the end of the year.