In the Media

Drop in $A stokes interest in IPOs – The Australian

Initial Public Offerings (“IPOs”) are set to increase as global investors invest in the IPO sector following a drop in the Australian dollar, and lower interest rates resulting in favourable share market conditions.

The lower Australian dollar means that stocks which were initially considered too high under Australian currency are now an attractive option as investors look for high-yielding investments. The increase in investment can also be attributed to successful major floats last year including the $3.6b listing of Healthscope Limited and $2b listing of the Spotless Group.

Treasury urges company tax cut – The Age

The Australian Treasury has shown its support for a change in the company tax rate which currently sits at 30 per cent. The recommendation follows a pre-election promise by Prime Minister Tony Abbot to cut the tax rate for small businesses by 1.5 per cent.

Such a cut would mean that the Federal Government would lose revenue in the short term although the long term effects are said to include economic growth and an overall increase in foreign investment. This comes as the government reassesses taxes payable by large multinational companies.

A tax discussion paper has been released, with a green paper to follow later this year, before a white paper is finalised.

Toll offer approved – Australian Financial Review

The Foreign Investment Review Board (“FIRB”) has approved Japan Post’s $6.5 billion takeover offer for Toll Holdings for $9.03 per share.

Treasurer Joe Hockey has given his support to the deal, noting that foreign investment is welcome where it contributes to Australia’s economy and builds upon economic growth and prosperity.

A shareholder meeting to vote on the offer has been set down for May 2015 with Toll chairman, Ray Horsburgh, stating that he is expecting a speedy outcome.

In focus – Conflict between company constitutions and shareholder agreements

Conflicts between company constitutions and shareholders agreements. A case commentary can be found here.

Cody Live Board Holdings Limited [2014] NSWSC 78 demonstrates that in circumstances where a provision of a company’s constitution conflicts with a provision in a shareholders agreement, the shareholders agreement will not always prevail.