Skywest Limited 03(R) - Review Panel Corrects CVC Media Release in Skywest 03 Review Proceedings

Release number


On 1 September 2004, the Panel announced its decision in the Skywest 03(R) proceedings. The Panel made a declaration of unacceptable circumstances in relation to the affairs of Skywest Limited (Skywest) and made orders requiring further disclosure for CaptiveVision Capital Limited’s (CVC) off-market takeover bid for all of the ordinary shares in Skywest (the CVC Bid) to proceed.

This Media Release is to correct a misleading media release published by CVC that day. CVC’s media release failed to give any acknowledgement to the Panel’s declaration of unacceptable circumstances and sought to reverse the direction of the Panel’s concerns and decision.

In its media release CVC did not mention that the Skywest 03(R) Panel had made a declaration of unacceptable circumstances in relation to CVC’s bid. Nor did CVC mention the nature of the information which the Panel had ordered it to disclose to Skywest shareholders.

CVC did however, claim or imply that:

  • the unacceptable circumstances in the Panel’s declaration were materially contributed to by Skywest;
  • CVC produced substantial and significant evidence which supported its position, and that this influenced the Panel to allow CVC’s bid to proceed;
  • Skywest’s directors had somehow acted improperly or against shareholders’ interests by making three applications to the Takeovers Panel (when in fact remedial actions or undertakings were required from CVC in relation to each of Skywest’s applications); and
  • CVC had “fully disclosed” to Skywest the nature of the relationship between CVC and the then CFO of Skywest, who had passed confidential information about Skywest to CVC (when in fact all that had been disclosed was that the Skywest CFO had previously been a director of CVC).

The Panel accepts none of the above claims or implications.

In addition, CVC claimed that the independent expert had declared the CVC bid to be “reasonable” when the opinion expressed by PriceWaterhouseCoopers was that the bid was “not fair but reasonable”.

The Panel considers that the CVC media release was misleading and materially misrepresented the Skywest 03(R) decision. The Panel takes great exception to the type of misleading spin which CVC has attempted to put onto the decision. Each party to a Panel decision will wish to put forward the aspects of a Panel decision that put them and their position in the best light. However, there is a proper line which separates putting things in the best light and being positively misleading. CVC’s media release crossed that line.

The Panel considered ordering CVC to withdraw its media release and issue a correcting statement. The fact that the Panel found no elements of the media that had reported the CVC media release in Australia was the only basis for not requiring CVC to do so.

The Panel is currently reviewing the supplementary bidder’s statement which it ordered CVC to publish as a condition of allowing the CVC Bid to proceed. Part of the work that that supplementary bidder’s statement is now required to do is to correct any misapprehensions amongst any Skywest shareholders who may have seen, or been advised of, CVC’s media release.

Copies of Skywest 03 and 03(R) Decisions

The Skywest 03(R) Panel’s decision relates to an application by CVC for review of the decision made by the Skywest 03 Panel in the Skywest 03 proceedings. The decision in Skywest 03 was announced by Panel media release TP04/69 on 30 July 2004 and the decision in Skywest 03(R) was announced by TP04/80 on 01 September 2004. Both Media Releases are available from the Panel's website at:

The Skywest 03(R) Panel and Process

The President of the Panel appointed Simon McKeon (Sitting President), Meredith Hellicar (Deputy President) and Teresa Handicott as the sitting Review Panel.

A copy of the declaration and orders are available on the Panel’s website, attached to the TP04/80 media release: Media Releases.

In due course, the Panel will publish the reasons for its decision in the Skywest 03(R) proceedings on its website at: Decisions.

Nigel Morris
Director, Takeovers Panel
Level 47 Nauru House, 80 Collins Street
Melbourne VIC 3000
Ph: +61 3 9655 3501