Table 3. Summary assessment of the options vs. Status Quo

Efficient allocation

Should improve information.

Little effect. Panel activism may improve information.

Little effect. Should improve information.

Little effect: firms can switch to Part 15. Panel role in Court may improve information

Would stop or discourage some efficiency improving reconstructions.

Competition for control

Potential deterioration, as may raise entry barriers and transaction costs to address requirements.

Potential marginal improvement as legal certainty could encourage greater use of reconstruction provisions.

Marginal deterioration if requirements to change control are made slightly more onerous.

Marginal deterioration as it removes a potentially less onerous route under which to change control.

Marginal deterioration as it removes potentially less onerous routes for changes in corporate control.

Fair treatment

Potential improvement if Panel activism results in equivalent consideration and higher voting thresholds.

Potential deterioration as certainty could encourage greater use of reconstruction provisions.

Potential improvement if threshold and/or information changes improve participation.

Marginal improvement, if it raises the test for compulsory acquisitions under amalgamations (under either Code or Court-approved scheme).

Improvement as all takeover proposals involving Code companies would be subject to Code.

International competitive capital markets

Unclear. Potential improvement if Court involvement by Panel improves the perception of market integrity, but may raise transaction costs; however, closer alignment with Australian requirements.

Potential deterioration, as it may increase the perception of risk, but greater certainty of available routes allows least cost option to be chosen.

Unclear. Possible improvement if changes perception of uncertainty or other negatives. But could increase transaction costs by raising process requirements.

Unclear. Reduces uncertainty somewhat but at the same time it may raise the transaction costs of participating in takeovers.

Unclear.  Reduces risk perception but at the same time it may raise the transaction costs of participating in takeovers.

Autonomous decisions

Potential improvement, as it results in higher voting thresholds under reconstructions.

Potential for some deterioration if greater use of reconstruction provisions.

Improvement through changes in voting thresholds when Code companies are involved.

Potential improvement for amalgamations, but potential to switch to Part 15 provisions.

Improvement through changes in voting thresholds when Code companies are involved.

Reasonable compliance cost

Increased Court involvement by Panel raises direct costs for bidders and the Panel. Potential increased enforcement by MED raises costs.

Increased Court involvement by Panel raises direct costs for bidders and Panel. Potential increased enforcement by MED raises costs.

Possible increases if process is more expensive.

Potential for increased costs as any switch of forums (to Code or Scheme) increases costs for the Panel.

May increase costs if switch from reconstruction provisions to Code increases Panel activity.