'THE WHOLE TRUTH, AND NOTHING BUT THE TRUTH?' - The Truth In Takeover trend in Australian mergers law, and Sectoral Implications

I have just read the Australian Takeover Panel's Ludowici decision regarding the 'truth in takeover' principle. Allens Lawyers provide a succint background to and summary of the decision. Principally, I am interested about Ludowici's relation to wider disclosure trends within the corporate and financial sectors of the Australian economy. An actual copy of the review Panel's decision is available at this link: http://www.takeovers.gov.au/content/DisplayDoc.aspx?doc=reasons_for_decisions/2012/004.htm. (Further, I provide this link to the Allens publication: Http://www.allens.com.au/pubs/ma/foma14mar12.htm). _____ As is evident in its reasons, the ATP may well consider bidding members' contributions to media publications regarding purported 'last and final' bidding statements in light of what circumstances contribute to form an efficient, competitive and informed market. While Part 5.1 of the Corporations Act explicitly applies to proposed Schemes of Arrangement not takeovers, the review Panel expressed no objection to application of the truth in takeover principle to SOA's as well. Hence, there is no theoretical barrier to applying a broad disclosure regime to mergers and acquisitions _____ Though contained by specific provisions of the Corporations Act, I nevertheless discern in the Panel's decision a connexion to wider trends respecting increased disclosure within financial services markets after the GFC. Broadly speaking, we have encountered increased vigilance from regulators such as ASIC following the Brisconnections, Storm Financial and MF Global fiascos for shareholders. In addition, the Gillard government has made noises for much stricter accreditation for financial planners in line with the government's proposed Future of Financial Advice ("FOFA") reforms. Presently, I understand, those reforms are "on hold". However, it seems clear the government will continue to advocate for financial services reform. (Cf with the National Consumer Credit Protection Act's introduction as that legislation related to increased oversight in respect to consumer credit transactions) _____ On its surface, Ludowici makes it clear that senior executives will have to be careful in referring to bid offers through public media and parse their words when speaking with journalists. Although the Chairman of FLS Ltd provided a tart "no" response in a Reuters column regarding future bid increases, the Chariman later qualified that negative as referring to no 'necessary' increase in the bid. As such, FLS had not closed the bidding process. The ambiguity, as Corrs and Allens indicate, is in determining when bidding members can be taken to have finalised the bidding process under the corporations law. _____ In this respect, there are some parallels to the 'truth in lending' and Know Your Customer protocols in relation to provision of consumer credit and financial advice. Also regulated by ASIC, these principles require strict conformity to disclosure standards in spite of the paucity of decision making and scenario planning for hard cases of failure to disclose. ____ In conclusion, I wonder whether specific administrative or judicial reasoning adduce evidence of a 'new normal' in relation to corporate actions and the supervision of Australia's financial markets.