The Code’s First 100+ Days

Published 1 December 2001

The Takeovers Code was a long time coming. Its commencement on 1 July 2001 was almost 10 years after the Takeovers Panel Advisory Committee was appointed which followed almost 10 years of intensive debate. In contrast to that lengthy build-up, July 1 brought literally an instantaneous reaction by the Panel to the operation of the takeovers market.

July 1 was a Sunday. At 9.30am that day a division of the Panel held its first meeting in connection with the contested bid for Montana. Later that day the first notice calling a meeting under the enforcement provisions was given accompanied by the first restraining order. It was a demanding start but it signalled clearly to the market that the Panel was up and operating and willing to exercise its powers outside normal working hours where necessary.

There has been a steady stream of commercial activity requiring Panel involvement, including:

  • Enforcement under Section 32 of the Act - Three meetings, two adverse decisions
  • Restraining Orders - Five restraining orders issued
  • Exemptions - 22 exemption applications, ten approved
  • Takeover Notices - eight takeover notices under the Code received
  • Independent Advisers - 2l independent advisers approved

Considering these matters and reaching decisions have helped the Panel consolidate and refine its policies.

The Panel is keen to be as transparent as possible to ensure that the market understands the reasons behind its decisions. It has published a range of policies on its website and in earlier issues of CodeWord, particularly CodeWord No 3 issued in September 2001.

A statement of reasons is published with each exemption granted from the Takeovers Code, and the exemption notices are posted in full on the website.

Market participants are urged to be aware of this published information in their dealings with the Panel. We aim to act quickly and decisively, being driven by the needs of the market and the purpose, policy and legal framework of the Code.

Procedures are in place to deal with exemption and approval applications. However, efficient processing of applications depends on applicants knowing the requirements and providing the Panel with all the information it needs. We cannot emphasise enough the importance of making full and frank disclosures to the Panel.

To further help the market understand how the Panel applies the Takeovers Code we are publishing, in this issue of CodeWord, comments on various procedures and on some of the Panel’s decisions.