From ASIC's Regulatory Guide no. 59:Part I: Policy of s746 RG...

From ASIC's Regulatory Guide no. 59:

Part I: Policy of s746 RG 59.3 The policy of s746 is to prevent the making of irresponsible public announcements by effectively imposing a duty of care on an offeror in preparing to make a bid. The section does this by forbidding an offeror from publicly announcing a bid unless it has taken adequate measures to ensure that sufficient funds will be available and that the bid can otherwise be made in accordance with the public announcement. This is important because a public announcement of a bid tends to affect the market in the target company’s shares. The announcement may lead to a false market if the offeror: (a) has not taken all measures necessary to ensure that it can complete the bid; or (b) later abandons the bid other than in accordance with the terms of the public announcement. RG 59.4 This is consistent with the Law’s general policy of establishing and preserving the integrity of the market. The Law does this by attempting to ensure that the acquisition of shares in a company takes place in an efficient, competitive and informed market (Gjergja v Cooper [1987] VR 167 at 215).