CSP01/033
The Corporations and Securities Panel has received an application for the review of the recent Panel decision to stop Reliable Power Inc's (Reliable) off market cash takeover offer for the ordinary shares in Pinnacle VRB Limited (Pinnacle) (the Bid).
The application for review was received from Reliable on 10 April 2001, and relates to the orders made by the Panel on 9 April 2001, stopping Reliable's Bid on the basis that Reliable had not demonstrated to the Panel's satisfaction that, through its financier, New West Capital LLC, Reliable has sufficient funds in place for the purpose of paying the consideration offered under the Bid.
In making the orders, the Panel stated that it considered that a bidder should have sufficient funding arrangements in place to ensure that the consideration offered under the bid could be provided. The basis of this was the principle that acquisitions of control over the voting shares in a listed company take place in an efficient, competitive and informed market. The Panel also stated that, for funding arrangements to be adequate, the bidder must have access to funds sufficient to pay for acceptances for its bid, whether directly or through firm arrangements with persons who have those funds to pay for acceptances.
Reliable's application for review asserts that the Panel's orders should be set aside because the Panel:
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applied an incorrect policy which is inconsistent with section 602 of the Corporations Law, as well as case law and ASIC policy in relation to funding arrangements; and
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incorrectly applied the policy because it was presented with evidence that New West had more than sufficient financial resources to meet its obligations to Reliable.
Reliable has requested that the Panel extend the date of application of the orders until a review of the Panel's decision to make those orders has been completed.
The President of the Panel Mr Simon McKeon has appointed Ms Karen Wood (sitting President), Mr Brett Heading (sitting Deputy President) and Ms Alice McCleary to sit on the Review Panel for this matter.
George Durbridge
Counsel, Corporations and Securities Panel
Level 47 Nauru House, 80 Collins Street, Melbourne VIC 3000
Ph: +61 3 9655 3553
george.durbridge@takeovers.gov.au
