Ian Ramsay, professor of corporate law at Melbourne University, isolated three key improvements in the draft Corporations Amendment (Takeovers) Bill 2006 to the way the Panel currently operates. They include a definition of substantial interest; ensuring the Panel is quick and effective; and reinforcing the role of the Panel as the primary forum for disputes, he said.

“I think it’s a welcome development, and I think that the changes the Treasurer proposes will get broad support from the takeovers community,” Ramsay said.

Partly a reaction to the Glencore decision, the Bill recognises the need for the law to modernise in terms of regulating the use of derivatives in the context of a takeover, he said. “The Bill will update our law, to ensure that [in the case of] new financial instruments, the law will apply to them, and in particular, that there will be disclosure.”

Melbourne University’s research into the first five years of the new Takeovers Panel, ending before Glencore, showed it took on average 14 days from application to publication of the decision, Ramsay said.

But the Glencore decision threatened to extend the time it took for decisions to be made, as submissions could be interpreted quite broadly, he said.

The draft Bill specifies that submissions are only required if an order of the Panel directly affects an individual, which Ramsay believes will “ensure that the Panel remains a quick and efficient decider of takeover disputes”.

Ramsay praised the Bill’s efforts to the preserve the Panel’s role as the primary forum for disputes, but stressed the important distinction between judicial review, which was essential, and the use of “tactical litigation” which involved lawyers “seeking multiple forums to have a takeover dispute decided”.

See full report ‘The Takeovers Panel strikes back’ on p24.