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Corporations Bill 2001

Part 6.2 Exceptions to the prohibition

   

611   Exceptions to the prohibition

                   The following table sets out:

                     (a)  acquisitions of relevant interests in a company’s voting shares that are exempt from the prohibition in subsection 606(1); and

                     (b)  acquisitions of relevant interests in a company’s voting shares resulting from acquisitions of legal or equitable interests in securities of a body corporate that are exempt from the prohibition in subsection 606(2).

Note:          Some of the items in the table cover only activities in relation to the company itself (items 7, 8, 12 and 13) while the other items cover acquisitions in that company that may occur through activities in relation to other companies.

 

Acquisitions that are exempt

[operative]

 

Takeover bids

 

Acceptance of takeover offer

1

An acquisition that results from the acceptance of an offer under a takeover bid.

See also section 612.

 

On-market purchase during bid period

2

An acquisition in relation to bid class securities that results from an on-market transaction if:

(a) the acquisition is by or on behalf of the bidder under a takeover bid; and

(b) the acquisition occurs during the bid period; and

(c) the bid is for all the voting shares in the bid class; and

 

(d) the bid is:

(i) unconditional; or

(ii) conditional only on the happening of an event referred to in subsection 652C(1) or (2).

See also sections 612 and 613.

 

On-market purchase of convertible securities during bid period

3

An acquisition of bid class securities that results directly from the exercise of rights attached to convertible securities if:

(a) the acquisition is by or on behalf of the bidder under a takeover bid; and

(b) the bidder acquired a relevant interest in the convertible securities through an on-market transaction during the bid period; and

(c) the bid is for all the voting shares in the bid class; and

(d) the bid is:

(i) unconditional; or

(ii) conditional only on the happening of an event referred to in subsection 652C(1) or (2).

See sections 612 and 613.

 

Acceptance of scrip offered as takeover consideration

4

An acquisition that results from the acceptance of:

(a) an offer under a takeover bid if the voting shares are included in the consideration for offers under the bid; or

(b) an offer that results in an acquisition to which item 5 applies.

See also section 612.

 

Nature of acquirer

6

An acquisition that results from the exercise by a person of a power, or appointment as a receiver, or receiver and manager , under a mortgage, charge or other security if:

(a) the person’s ordinary business includes providing financial services; and

(b) the person took or acquired the security in the ordinary course of their business of providing financial services and on ordinary commercial terms.

 

Approval by resolution of target

7

An acquisition approved previously by a resolution passed at a general meeting of the company in which the acquisition is made, if:

(a) no votes are cast in favour of the resolution by:

(i) the person proposing to make the acquisition and their associates; or

(ii) the persons (if any) from whom the acquisition is to be made and their associates; and

(b) the members of the company were given all information known to the person proposing to make the acquisition or their associates, or known to the company, that was material to the decision on how to vote on the resolution, including:

(i) the identity of the person proposing to make the acquisition and their associates; and

(ii) the maximum extent of the increase in that person’s voting power in the company that would result from the acquisition; and

 

(iii) the voting power that person would have as a result of the acquisition; and

(iv) the maximum extent of the increase in the voting power of each of that person’s associates that would result from the acquisition; and

(v) the voting power that each of that person’s associates would have as a result of the acquisition.

 

Target newly formed

8

An acquisition that results from an issue of securities of the company in which the acquisition is made if the company has not started to carry on any business and has not borrowed any money.

 

Manner of acquisition

 

3% creep in 6 months

9

An acquisition by a person if:

(a) throughout the 6 months before the acquisition that person, or any other person, has had voting power in the company of at least 19%; and

(b) as a result of the acquisition, none of the persons referred to in paragraph (a) would have voting power in the company more than 3 percentage points higher than they had 6 months before the acquisition.

 

Rights issues

10

An acquisition that results from an issue of securities that satisfies all of the following conditions:

(a) a company offers to issue securities in a particular class;

(b) offers are made to every person who holds securities in that class to issue them with the percentage of the securities to be issued that is the same as the percentage of the securities in that class that they hold before the issue;

(c) all of those persons have a reasonable opportunity to accept the offers made to them;

 

(d) agreements to issue are not entered into until a specified time for acceptances of offers has closed;

(e) the terms of all the offers are the same.

This extends to an acquisition by a person as underwriter to the issue or sub-underwriter.

See section 615.

 

Dividend reinvestment etc.

11

An acquisition that results from an issue of:

(a) shares in a company to existing holders of shares in the company under a dividend reinvestment plan or bonus share plan; or

(b) interests in a managed investment scheme to existing holders of interests in the scheme under a distribution reinvestment plan or switching facility;

if the plan or facility is available to all members.

Disregard any unavailability to foreign holders in determining whether the plan or facility is available to all members.

 

Initial public offering (IPO) fundraising

12

An acquisition that results from an issue under a disclosure document of securities in the company in which the acquisition is made if:

(a) the issue is to a promoter; and

(b) the disclosure document is the first issued by the company; and

(c) the disclosure document disclosed the effect that the acquisition would have on the promoter’s voting power in the company.

 

Underwriting of fundraising

13

An acquisition that results from an issue under a disclosure document of securities in the company in which the acquisition is made if:

(a) the issue is to a person as underwriter to the issue or sub-underwriter; and

(b) the disclosure document disclosed the effect that the acquisition would have on the person’s voting power in the company.

 

Acquisition through listed company

14

An acquisition that results from another acquisition of relevant interests in voting shares in a body corporate included in the official list of:

(a) a stock exchange; or

(b) a foreign body conducting a stock market that is a body approved in writing by ASIC for the purposes of this item.

 

Wills etc.

15

An acquisition through a will or through operation of law.

 

Forfeiture of shares

16

An acquisition that results from an auction of forfeited shares conducted on-market.

 

Compromise, arrangement, liquidation or buy-back

 

Part 5.1 compromise or arrangement

17

An acquisition that results from a compromise or arrangement approved by the Court under Part 5.1.

 

Section 507 arrangement

18

An acquisition that results from an arrangement entered into by a liquidator under section 507.

 

Buy-back

19

An acquisition that results from a buy-back authorised by section 257A.

 

Regulations

20

An acquisition made in a manner or in circumstances prescribed by the regulations. The circumstances may include acquisitions of relevant interests in voting shares in a specified body or class of bodies.

612   Effect of non-compliance with takeover rules for exceptions 1 to 4

                   The exceptions in items 1 to 4 of the table in section 611 do not apply to a takeover bid if the bid is carried out in contravention of:

                     (a)  section 618 (full or proportionate bid); or

                     (b)  section 619 (offers to be the same); or

                     (c)  subsection 621(3) (minimum price); or

                     (d)  subsection 624(1) (minimum offer period); or

                     (e)  sections 625 to 630 (conditional offers); or

                      (f)  items 2, 3 and 6 in the table in subsection 633(1) (procedural steps for off-market bid); or

                     (g)  items 3, 4 and 6 in the table in section 635 (procedural steps for market bid).

613   Bidder not to exercise voting rights if failure to send bids for off-market acquisition—exception 2 or 3

                   If the exception in item 2 or 3 of the table in section 611 applies to an acquisition on-market during a takeover bid, the bidder is not entitled to exercise the voting rights attached to the shares if:

                     (a)  the bid is an off-market bid; and

                     (b)  the bidder fails to send offers under the bid within 28 days after giving the bidder’s statement to the target.

615   Treatment of foreign holders under equal access issue—exception 10

                   The exception in item 10 of the table in section 611 applies even though the conditions set out in the item are not satisfied in respect of foreign holders of the company’s securities if, under the terms of the offers:

                     (a)  the company must appoint a nominee for foreign holders of the company’s securities who is approved by ASIC; and

                     (b)  the company must transfer to the nominee:

                              (i)  the securities that would otherwise be issued to the foreign holders who accept the offer; or

                             (ii)  the right to acquire those securities; and

                     (c)  the nominee must sell the securities, or those rights, and distribute to each of those foreign holders their proportion of the proceeds of the sale net of expenses.