Take-overs prevention

Press, Volume CXII, Issue 33032, 27 September 1972, Page 15

Take-overs prevention

(N.Z.P.A -Reuter—Copyright) CANBERRA. September 26. The Australian Prime Minister (Mr William McMahon) said today that from tomorrow his Government would apply measures to prevent foreign take-overs of Australian businesses. Speaking in the House of Representatives. Mr McMahon said that the measures would be applied where takeovers were considered against the national interest and would apply to take-over proposals already current. Mr McMahon also announced that from tomorrow the Reserve Bank would refuse exchange control approval for all overseas borrowings which would be repayable, or carry options to repay, in two years or less. Mr McMahon announced that the Government proposed to abolish forthwith guidelines introduced in May, 1965, which limited the freedom of overseas-owned companies to borrow in Australia. He outlined criteria by which the Government would consider foreign take-overs would be against the national interest.

Of the anti-take-over measures, he said: “The legislation will apply to acquisitions of shares or

I other assets by overseas interests which might reason- ■ ably be expected to result in ; control of an Australian busi- ; ness passing to overseas in- [ terests.” Mr McMahon said that in 1 the case of company take- ! overs, there would be a presumption that acquisition by' any one overseas interest or 'associated group of 15 per ■ cent or more, or by overseas i interests in the aggregate of ■ 40 per cent or more, of the I voting power of an Austraj ban company, could consti- ' tute a take-over. i For this purpose, overseas I interest would include an Australian-incorporated company' in which any’ one overseas interest or group held 15 per cent or more of the voting power — or in which overseas interests had in the aggregate 40 per cent or more of the voting power. Mr McMahon said that cases where control of a business would pass into overseas hands through acquisition of all. or a substantial part, of the assets of the business would also be subject to the legislation. “The measures may also apply to the transfer of a significant part of the ownership or right over a valuable or potentially valuable mineral area, such as can occur through transactions known in the mining industry as ‘farm-ins’,” he said. “If overseas interests demonstrate that an acquisition would not give a significant degree of foreign control, the measures would not apply. "They will also not apply if the take-over would simply transfer control from one overseas interest or group to another. “The measures will, in general, apply to cases where the company concerned, whether listed or unlisted, has assets of more than $1 million.”