Australia’s Takeovers Panel has released the following updated Guidance Notes:

• Guidance Note 7: Lock-Up Devices
• Guidance Note 12: Frustrating Action
• Guidance Note 14: Funding Arrangements
• Guidance Note 17: Rights Issues

Copies are available at www.takeovers.gov.au

The Panel identified the following key changes and clarifications in the Guidance Notes:

Guidance Note 7: Lock-Up Devices

• The guidance note applies to any control transaction.
• Triggers for payment of break fees must be reasonable.
• There is clarification of the 1% guideline for break fees.
• Re-writing of the section on restriction agreements.

Guidance Note 12: Frustrating Action

• Shareholders may be given a choice between proposals in different ways. 
• Where a target can get shareholder approval of a frustrating action by directors announcing they will enter into an agreement after a specified, reasonable time (unless control has by then passed to the bidder), ‘reasonable time’ may be affected by the length of the bid period or the status of any bid conditions.
• Additional examples.

Guidance Note 14: Funding Arrangements

• Reduced internal-cross referencing.
• Bringing related subjects together.

Guidance Note 17: Rights Issues

• Updated references.
• Removal of concepts of presumption and onus.
• Sets out factors that are relevant to the Panel’s consideration of unacceptable circumstances.