What legal obligations apply to directors during a takeover

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Reference no: EM133063014

Question 1: What is a company takeover? What interests does the Corporations Act seek to protect? Does it make any difference to the operation of the law if a takeover is conducted via the stock exchange?

Question 2: What legal obligations apply to directors during a takeover? Does liability attach to other persons whose statements appear in a takeover document.

Question 3: A Ltd has held 19.9% of B Ltd (a company listed on the Australian Stock Exchange) for two months. The directors of A Ltd wish to gain control of B Ltd as soon as is possible and are considering making an offer to the shareholders of B Ltd. The offer they wish to make is one share in A Ltd plus $1.00 in cash for each share in B Ltd.

What issues concerning the law in relation to takeovers do these facts raise and what must the directors of A Ltd do to achieve their aim?

Question 4: Solly is a well-known investment adviser. He is selling his luxury motorboat to Mr Lock, the CEO of a large public company. Solly phones Mr Lock and threatens to sell his boat to someone else unless the deal is done soon. Mr Lock says to Solly "Don't say anything but our company is just about to be taken over by Telstrate the largest communications company in Asia, once that is done I will have the $10 million in cash" The next day Solly buys $100,000 worth of Telstrate shares at $5 per share. When news of the successful takeover is publicised the shares rise to $10 per share. Solly sells and makes $5 profit per share. Is this insider trading? Explain your answer.

Reference no: EM133063014

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