Wednesday, July 11, 2012

ASIC pursuit of David Jones mystery bidder "continuing".

By Business editor Peter Ryan

The corporate watchdog says it's still investigating the recent bizarre takeover bid for the David Jones department store.

The surprise offer from an unknown private equity company in Britain saw the David Jones share price rocket almost twenty percent only to plunge when the bid was withdrawn.

The chairman of the Australian Securities & Investments Commission Greg Medcraft told AM that discussions are under way with regulators in other countries to determine the identity and
whereabouts of EB Private Equity and its alleged founder John Edgar.

"We're liaising with UK authorities and continuing our investigation," Mr Medcraft said.

"When we have situations like this there are a number of courses of action we take. First of all, it's working with our fellow regulators in other jurisdictions and also looking at price activity is clearly something we look at."

Mr Medcraft said ASIC was working to update rules on continuous disclosure after the release of the $1.6 billion mystery offer caused market mayhem and sparked concerns the DJs share price was being manipulated.

"We will work with ASX to look to update disclosure laws. It has been clear for some time that the guidance needs to be updated particularly with the impact of social media and making sure social media doesn't send the wrong price signals to the market," Mr Medcraft said.

A review of disclosure rules could centre on whether to call a trading halt if a company is not satisfied that price signals to the market were not accurate.

The regulator has confirmed it's scrutinising share trades on the day to determine who stood to make a windfall from the unsubstantiated bid which could still turn out to be a hoax.

So does ASIC think the DJ's bid was a hoax? Mr Medcraft was coy in his reply.

"All I say we are continuing to investigate. I can't really say any more than that."

However, Mr Medcraft admitted the bid came as a shock to the market, while pledging to refine rules for chaning times.

"I think the market was surprised. We saw what happened. You're shaped by experience and now we have to make sure we are shaped by experience and we need to learn from that to ensure it doesn't happen again," Mr Medcraft said.

ASIC is also confronting the widening use of social media and its use as a tool in sending viral messages that could contain price signals.

"Social media is now a fact of life and that in itself will shape change."

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