The Takeovers Panel has released a consultation paper on a
rewrite of Guidance Note 17: Rights Issues (GN17). The
main amendments to GN17 look to provide clarity on mitigating
potential control effects on listed companies and the operation of
shortfall facilities. It also clarifies that a rights issue will
generally be acceptable if there is a clear need for funds,
provided an appropriate dispersion strategy has been
implemented.
Submissions on the revised draft GN17 are due by 6 April
2018.
Interaction with other legislative instruments
Under s 606 of the Corporations Act 2001 (Cth)
(Corporations Act), a person is prohibited from acquiring a
relevant interest in a listed company's voting shares if that
person's voting power in the company would increase to above
20% via the transaction, otherwise known as the 20% Rule.
