PE financing to be targeted in Australia takeover law review

So far the debate has largely focused on creep provisions, whereby investors can increase their stake in a company by three percentage points every six months, once they pass 19.9%, without having to bid for all the shares. However, ASIC Chairman Greg Medcraft told The Australian Financial Review that the review would stretch further, highlighting the use of innovation, technology and derivatives to get around the laws.

Behavior deemed not to comply with the spirit of the law includes a tendency among bidders - often private equity firms - to make uncertain and conditional proposals without financing.

Concerns have been expressed about EB Private Equity's recent takeover bid for David Jones, Australia's second-largest department store chain. The UK-based investor offered A$1.52 billion ($1.55 billion), increased it to A$1.65 billion, and then pulled out citing publicity surrounding the deal. EB said a syndicate of banks and investments institutions would put up A$450 million of the capital, but supplied no further information on how this would be arranged.

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• Topics
• Australasia
• Regulation
• Buyouts
• regulation
• Australia
• buyout