1.         Key Terms

 

After completing Topic 5, you should be able to explain the following terms and concepts:

·         ASX ·         Insider trading ·         Listing rules	·         Operating rules ·         Market misconduct ·         Control
·         Takeover ·         On-market ·         Bid ·         Bidder Statement	·         Takeover Panel ·         Off-market ·         Expert report ·         Target Statement

2.         Learning/Tutorial Activities

 

The following activities must be attempted prior to the tutorial.

1.  What is meant by a company listing on the Australian Stock Exchange?  Research question: What advantages might listing offer a company?  Are there any disadvantages?

 

 

 

 

 

2.  Ozbank, a listed Australian company and one of Australia’s leading banks has just entered into an agreement to acquire a Chilean Bank on very favourable terms.  Must Ozbank disclose the existence of this agreement to anybody?  Why or why not? (You should assume that Chapter 6 of the Corporations Act, “Takeovers” is not relevant).

 

 

3.  Would your answer be different (giving reasons why or why not?) if:

 

·         It was a term of the agreement that its existence should be kept confidential  for the time being.

·         Ozbank is in negotiations with the Chilean Bank but has not made any firm decision to proceed with the acquisition

·         Ozbank is in negotiations with the Chilean Bank but has not made any firm decision to proceed with the acquisition.  At the same time the financial media is full of speculation that Ozbank may be about to acquire the Chilean bank.

·         Negotiations have broken down and the acquisition will not proceed. At the same time, the financial media is full of speculation that Ozbank is about to acquire an Argentinian bank, which has caused a spike in Ozbank’s share price.

 

 

 

4. What is the purpose of continuous disclosure? What entities are bound to provide continuous disclosure?  Outline the reporting timeframes in relation to continuous disclosure.

 

 

 

 

5. Explain the key differences between off-market and market bids (You can ignore any purely procedural differences).  Which type of bid do you think is likely to prove more popular with potential bidders?  Why?  Do you think this type of bid is likely to be as popular with shareholders in Target companies?  Why or why not?

 

 

 

 

 

6. Compare and contrast the compulsory acquisition and compulsory buy–out provisions of the Takeovers Code.

 

 

 

 

 

My Notes