Promina fined for non-disclosure
Promina has been fined $100,000 by the Australian Securities and Investments Commission (ASIC) for not adequately informing investors about a $7.9 billion takeover offer from Suncorp.
ASIC says the infringement – failing to adhere to Corporations Act disclosure obligations – is the first involving a company with a market capitalisation greater than $1 billion.
Executive Director of Enforcement Jan Redfern says confidentiality surrounding Suncorp’s bid was lost after media reports about midday on October 11 last year contained specific aspects of the bid.
She says Promina told Suncorp on October 9 the indicative price proposed for ordinary shares had to be more compelling if Promina was to support the offer. About 6pm on October 10 Promina MD Mike Wilkins had a phone conversation with Suncorp MD John Mulcahy concerning the proposal.
ASIC says Promina contravened the Act from shortly after midday on October 11 to just before 8.30am the next day when Promina made the announcement to the Australian Stock Exchange (ASX).
A “trading window” was therefore created in which the market was not fully informed. Promina’s share price increased almost 12% to $6.82 then closed about 6% higher at $6.48.
“ASIC recognises that companies in merger negotiations may be placed in a difficult position,” Ms Redfern said.
“But once the confidentiality of any negotiation has been lost, the ASX listing rules require that material information be disclosed to the market … whether or not the negotiation is complete.”
ASIC says the infringement – failing to adhere to Corporations Act disclosure obligations – is the first involving a company with a market capitalisation greater than $1 billion.
Executive Director of Enforcement Jan Redfern says confidentiality surrounding Suncorp’s bid was lost after media reports about midday on October 11 last year contained specific aspects of the bid.
She says Promina told Suncorp on October 9 the indicative price proposed for ordinary shares had to be more compelling if Promina was to support the offer. About 6pm on October 10 Promina MD Mike Wilkins had a phone conversation with Suncorp MD John Mulcahy concerning the proposal.
ASIC says Promina contravened the Act from shortly after midday on October 11 to just before 8.30am the next day when Promina made the announcement to the Australian Stock Exchange (ASX).
A “trading window” was therefore created in which the market was not fully informed. Promina’s share price increased almost 12% to $6.82 then closed about 6% higher at $6.48.
“ASIC recognises that companies in merger negotiations may be placed in a difficult position,” Ms Redfern said.
“But once the confidentiality of any negotiation has been lost, the ASX listing rules require that material information be disclosed to the market … whether or not the negotiation is complete.”