TP02/002
The Panel advises that it yesterday received an application from Magic Millions under section 657EA of the Corporations Act requesting a review of its decisions in the Brisbane Broncos Nos 1 and 2 proceedings.
In Brisbane Broncos No.1, the Panel decided that Magic Millions is under an obligation to continue with its bid by 29 January 2002, in accordance with its announcement of 29 November 2001. The Panel decided that failure by Magic Millions to do so by that time would mean that unacceptable circumstances are likely to exist and that it will be prepared to make a declaration to that effect.
Brisbane Broncos No.2 concerned a condition of BB Sports bid that would have allowed it to abandon its bid if any act of ASIC or the Panel, or any other event, took place before the BB Sports bid closed, which would permit Magic Millions to withdraw its bid or make its bid otherwise than in accordance with the Act. The Panel decided that it would be unacceptable for BB Sports to rely on its condition being triggered by Magic Millions' abandoning its bid because the making of BB Sports' bid (which was the catalyst for Magic Millions' purported abandonment) was an event that was entirely within BB Sports' control. The Panel accepted from BB Sports a revised condition that excludes from its operation any act of BB Sports itself and any decision of ASIC or the Panel, other than certain modifications of the law.
The application states the following grounds for review of each decision:
- The Panel was in error in deciding that Magic Millions is obliged to continue with its bid in accordance with its 29 November announcement having regard to section 631 and 670F of the Corporations Act and ASIC's Practice Note 59 and in deciding that BB Sports announcing its bid did not substantially alter the circumstances in which Magic Millions made its bid;
- Failure by Magic Millions to make offers to Brisbane Broncos shareholders by 29 January would not be likely to give rise to unacceptable circumstances and the Panel was wrong to decide that the grounds Magic Millions relied upon were not of a kind contemplated by section 670F and that the policy behind the relevant provisions of the Corporations Act required the bid to proceed;
- The Panel went beyond its jurisdiction or erred in deciding that failure to make its offer would mean that Magic Millions may incur liability in damages;
- The form of the revised condition which the Panel accepted from BB Sports is inconsistent with the basis for the Panel's decision in Brisbane Broncos No.2 since the condition still refers to decisions of ASIC or the Panel that would modify the time periods in sections 631 and 633 of the Corporations Act; and
- ASIC and the Panel would be mindful that any decision which would modify the time periods in section 631 or 633 may trigger the revised condition and such a policy is undesirable.
The President of the Panel, Mr Simon McKeon, will shortly appoint a sitting Panel to consider this review application. The President of the Panel at first instance, Ms Jennifer Seabrook, has consented to the review application under section 657EA(2) of the Corporations Act.
George Durbridge
Counsel, Takeovers Panel
Level 47 Nauru House, 80 Collins Street, Melbourne VIC 3000
Ph: +61 3 9655 3553
george.durbridge@takeovers.gov.au
