Tougher rules on off-market offers
The Federal Government will impose regulatory changes to increase the disclosure requirements for off-market share offers where payment is made through installments over several years.
The move was announced by the Minister for Superannuation and Corporate Law, Senator Nick Sherry, who pointed out that companies making such offers did so at prices that were above the current market price and therefore seemed attractive, but in most cases paid for the shares in installments over the next 20 years.
He said the Government would require the buyer to provide additional information on how and when installment payments would be made and the real value of the offer relative to the current market value.
“It is wrong that investors, particularly those who might be more susceptible, should be misled or deceived into accepting an unsolicited share offer where this offer is clearly not in their financial interest,” Sherry said.
The Minister said companies frequently targeted the aged, the frail or those who might not fully comprehend the outcome of an off-market sale.
Senator Sherry said subject to the approval of the Executive Council, the regulations were scheduled for implementation by the end of June.
AUTHOR
Mike Taylor
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