By Diana Nicholson, Shaun McRobert David Friedlanderand David Jewkes. King & Wood Mallesons’ Australia office.
So, you haven’t had an opportunity to keep up with what’s happened in the Takeovers Panel this year? No matter, we’ve done the hard work for you. The 10 things you need to know are:
1. Bidders should exercise caution when seeking to deduct the value of franking credits from their bid consideration.
Bidders generally reduce their bid consideration by the value of any dividend received by a target shareholder during the bid period. Recently, bidders have also sought to deduct the value of any franking credits associated with the dividend. The Panel consulted on this issue in 2014 but ultimately didn’t publish any formal guidance. Responses to the consultation paper showed divergent market views on whether the value of franking credits should be deducted from bid consideration at all, and how value should be assessed if it was to be deducted.
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