Montana Decision Strengthens Sharemarket Respect
Montana Decision will Strengthen Respect for New Zealand Sharemarket
The Montana Committee's decision that Lion must dispose of 19% of the Montana shares will strengthen respect for the New Zealand sharemarket, ACT Commerce spokesman Stephen Franks said today.
"Hopefully we will
hear no more talk from the ignorant (which includes leaders)
about our 'wild west' market when:
* The Rules have
worked;
* The Rules were designed to require notice and
pause before take over buying, very similar to United States
federal law;
* Unlike Australian law our Rules have
avoided court action and costs. In comparison this has been
speedy efficient and cheap;
* This is the first case out
of more than 70 that have been governed by the Rules to need
this amount of review;
* This take over regime was
selected eight years ago by Montana shareholders who had a
choice of regimes. Including one like
Australia's;
* Shareholders who 'missed out' on the
so-called big players' premium have had ample chance since
to get 40 cents more than the big players in the market that
has been waiting for the auction to resume.
* The auction
for control can proceed. "If it weren't for the giant step
backward to Australian/UK rules starting from Sunday, the
auction could be transparent and efficiently conducted
electronically on the New Zealand Stock Exchange.
"My only criticism of today's well explained decision is the apparent slur on brokers who have been involved.
This was a contested try decision, not a yellow card decision. I don't see why they should be excluded from the compulsory sell-down by Lion (and presumably by the Exchange if Lion fails to act).
"The decision raises two interesting issues that need urgent law reform attention. The Rule against contractual penalties should be repealed.
And as the Exchange argued when the Companies Act was passed in 1993, there should be no doubt about the enforceability of Rules and Rule changes incorporated in a constitution by reference to a document like the NZSE Rules," Stephen Franks said.
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