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ARTICLE · 19 MARCH 2022

No Talk Provisions: Has The Battle Been Won?

Corrs Chambers Westgarth
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The battle for strategic advantage in takeovers is likely to move on from the no talk provisions.

AustraliaCorporate/Commercial Law
Justin Fox
Justin Fox
Andrew Lumsden
Andrew Lumsden
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In our recent article 'No talks - the new battleground in takeovers' we identified three recent takeover bids where bidders had tested the boundaries of market practice by having their target sign up to a 'no talk' restriction that is not subject to a fiduciary out.  

We noted the views of the Takeovers Panel on these (more aggressive) deal protections would be tested in the application brought by BGH in relation to the process deed entered into between CapVest Ventures (CapVest) and its target, Virtus Health (Virtus).

At issue in that application was the clause in the process deed under which the board of Virtus agreed they would not talk to any alternate bidder during an agreed exclusivity period. These 'no talk' provisions are common practice in takeovers in Australia. However, the no talk is usually subject to a 'fiduciary out', which allows the target to progress a competing unsolicited offer if the target board considers that they are required to do so as

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