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
* 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
"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penalties should be repealed.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