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Corporations Bill 2001

Part 6.5 The takeover procedure

Division 1 The overall procedure

631   Proposing or announcing a bid

Bid must proceed within 2 months after proposal

             (1)  If a person publicly proposes to make a takeover bid for securities in a company, either alone or with other persons, the person contravenes this subsection unless they make offers for the securities under a takeover bid within 2 months after the proposal. The terms and conditions of the bid must be the same as or not substantially less favourable than those in the public proposal.

Note:          The Court has power under section 1325B to order a person to proceed with a bid.

Proposals if takeover bid not intended

             (2)  A person must not publicly propose, either alone or with other persons, to make a takeover bid if:

                     (a)  the person knows the proposed bid will not be made, or is reckless as to whether the proposed bid is made; or

                     (b)  the person is reckless as to whether they will be able to perform their obligations relating to the takeover bid if a substantial proportion of the offers under the bid are accepted.

             (3)  Section 1314 (continuing offences) and subsection 1324(2) (injunctions) do not apply in relation to a failure to make a takeover bid in accordance with a public proposal under subsection (1).

Note:          For liability and defences for contraventions of this section, see sections 670E and 670F.

632   Overview of steps in an off-market bid

                   The following diagram gives an overview of the steps involved in an off-market bid.

 

Overview of steps in an off-market bid

 

Bidder

 

 

 

Step 1

bidder’s statement (together with offer document)

 

——

*  ASIC

*  target

*  [exchange]

 

 

 

 

 

 

 

Step 2

notice that Step 1 done

——

*  ASIC

 

 

 

 

 

 

Step 3

bidder’s statement and offers

——

*  holders of bid class securities

 

 

 

 

 

 

Step 4

notice that Step 3 done

 

——

*  target

*  ASIC

*  [exchange]

 

 

 

 

 

 

 

Target

 

 

 

Step 5

target’s statement

 

 

——

*  bidder

*  holders of bid class securities

*  ASIC

*  [exchange]

 

The holders then consider the terms of the offer, and the statements provided by the bidder and the target, and decide whether to accept the offer under section 653A before the end of the bid period. A holder may also decide to sell on-market during the bid period.

 

633   Detailed steps in an off-market bid

             (1)  The following table provides for the steps that a bidder must take to make an effective off-market bid and the steps that a target must take when an off-market bid is made.

 

Steps in off-market bid

[operative table]

 

Steps

Timing and relevant provisions

1

The bidder must prepare:

·    a bidder’s statement; and

·    if the bidder’s statement does not set out all the terms of the offer—an offer document that sets out the other terms of the offer.

See section 636 for content of statement.

2

The bidder must lodge a copy of the bidder’s statement and offer document with ASIC.

 

3

The bidder must send a copy of the bidder’s statement and offer document to the target.

To be done on the day the bidder’s statement is lodged or within 21 days afterwards

4

The bidder must lodge with ASIC a notice stating that the bidder’s statement and offer document have been sent to the target.

To be done on the day the bidder’s statement is sent to the target

5

The bidder must send a copy of the bidder’s statement and offer document to each securities exchange that has a stock market on which the target’s securities are quoted.

To be done on the day the bidder’s statement is sent to the target

See also subsection (5).

6

The bidder must send the bidder’s statement and offers to each person (other than the bidder) who holds:

·    securities in the bid class; or

·    if the bid extends to securities that come to be in the bid class due to the conversion of or exercise of rights attached to other securities (see subsection 617(2))—the other securities;

as at the date set by the bidder under subsection (2).

The offers must be made on the terms set out in the bidder’s statement and the offer document lodged with ASIC under item 2.

To be done:

·    within a 3 day period; and

·    within 14-28 days after the bidder’s statement is sent to the target

The directors of the target may agree that the offers and accompanying documents be sent earlier.

See also subsections (5) and (6).

Item 2 of the table in section 611 covers offers made by the bidder on-market during the period between the lodgment of the bidder’s statement and the making of the offers under the bid.

Sections 648B and 648C provide for the manner in which documents may be sent to holders.

7

The bidder must send a notice to the target that the bidder’s statement and offers have been sent as required by item 6.

The notice must state the date of the offers.

To be done on the day all offers have been sent as required by item 6

See subsection 620(1) on date of offer.

8

The bidder must send a notice that offers have been sent as required by item 6 to each securities exchange that has a stock market on which the target’s securities are quoted.

To be done on the day all offers have been sent as required by item 6

9

The bidder must lodge with ASIC a notice that offers have been sent as required by item 6.

To be done on the day all offers have been sent as required by item 6

10

The target must prepare a target’s statement.

See section 638 for content of statement.

11

The target must send the target’s statement (and any accompanying report) to the bidder.

To be done no later than 15 days after the target receives a notice that all offers have been sent as required by item 6

12

The target must send a copy of the target’s statement (and any accompanying report) to each person who holds:

·    securities in the bid class; or

·    if the bid extends to securities that come to be in the bid class due to the conversion of or exercise of rights attached to other securities (see subsection 617(2))—the other securities;

as at the date set by the bidder under subsection (2).

To be done:

·    no earlier than the day on which the target sends the target’s statement to the bidder; and

·    no later than 15 days after the target receives a notice that all offers have been sent as required by item 6

Sections 648B and 648C provide for the manner in which documents may be sent to holders.

13

The target must lodge a copy of the target’s statement (and any accompanying report) with ASIC.

To be done on the day the target’s statement is sent to the bidder

See also subsection (7).

14

The target must send a copy of the target’s statement (and any accompanying report) to each securities exchange that has a stock market on which the target’s securities are quoted.

To be done on the day the target’s statement is sent to the bidder

See also subsection (7).

Date for determining holders of securities

             (2)  The people to whom information is to be sent under items 6 and 12 of the table in subsection (1) are the holders of the securities referred to in those items as at the date set by the bidder in:

                     (a)  the bidder’s statement; or

                     (b)  a separate written notice given to the target on or before the date set by the bidder.

Note:          The bidder may set the date when the bidder asks the target for a list of members under section 641.

             (3)  The date set by the bidder must be:

                     (a)  on or after the date on which the bidder gives the bidder’s statement, or the separate written notice, to the target; and

                     (b)  on or before the date on which the first offers under the bid are made to holders of the securities.

             (4)  As soon as practicable after setting the day, the bidder must give notice of it by:

                     (a)  if the securities in the bid class are quoted—giving the notice to the relevant securities exchange; or

                     (b)  otherwise—lodging the notice with ASIC.

Information to be sent with bidder’s statement

             (5)  A bidder’s statement required to be sent under item 5 or 6 in the table in subsection (1) must be sent together with any other information sent by the bidder to the target with the statement.

Information to be sent with notices that offers have been sent

             (6)  If the bidder sends the people to whom the bidder’s statement is sent under item 6 of the table in subsection (1) additional information together with the bidder’s statement and the offer, the bidder must also include that information in any notice under item 7, 8 or 9 of the table.

Information to be sent with target’s statement

             (7)  If the target sends the people to whom the target’s statement is sent under item 12 of the table in subsection (1) additional information together with the target’s statement, the target must also include that information in any notice under item 13 or 14 of the table.

634   Overview of steps in a market bid

                   The following diagram gives an overview of the steps involved in a market bid.

 

Overview of steps in a market bid

 

Bidder

 

 

 

Step 1

announcement of bid to the exchange

 

 

 

 

 

 

 

 

 

Step 2

bidder’s statement

——

*  exchange

*  target

*  ASIC

 

 

 

 

 

 

Step 3

bidder’s statement and any other documents sent with it to the exchange

——

*  holders of bid class securities

 

 

 

 

 

 

Step 4

copy of documents sent to holders

——

*  exchange

*  ASIC

 

 

 

 

 

 

 

Target

 

 

 

Step 5

target’s statement

 

——

*  exchange

*  bidder

*  ASIC

*  holders of bid class securities

 

 

 

 

 

 

 

Bidder

 

 

 

Step 6

make offers on the exchange

 

 

 

The holders then consider the terms of the offer, and the statements provided by the bidder and the target, and decide whether to accept the offer on-market before the end of the bid period.

635   Detailed steps in a market bid

                   The following table provides for the steps that a bidder must take to make an effective market bid and the steps that a target must take when a market bid is made.

 

Steps in market bid

[operative]

 

Steps

Timing and relevant provisions

1

The bidder must prepare a bidder’s statement.

See section 636 for content of statement

2

The bidder must have the bid announced to the relevant securities exchange.

 

3

The bidder must send a copy of the bidder’s statement to the relevant securities exchange.

To be done on the day the announcement is made

4

The bidder must send to the target:

·    a copy of the bidder’s statement; and

·    a copy of any other document that was sent with the bidder’s statement to the relevant securities exchange.

To be done on the day the announcement is made

5

The bidder must lodge with ASIC:

·    a copy of the bidder’s statement; and

·    a copy of any other document that was sent with the bidder’s statement to the relevant securities exchange.

To be done on the day the announcement is made

6

The bidder must send to each holder of bid class securities (other than the bidder):

·    a copy of the bidder’s statement; and

·    a copy of any other document that was sent with the bidder’s statement to the relevant securities exchange.

Within 14 days after the announcement is made

Sections 648B and 648C provide for the manner in which documents may be sent to holders.

7

The bidder must lodge with ASIC a copy of every other document sent to holders of bid class securities with the bidder’s statement.

To be done no later than the day copies of the bidder’s statement have been sent to all holders of bid class securities

8

The bidder must give the relevant securities exchange a copy of every other document sent to holders of bid class securities with the bidder’s statement.

To be done no later than the day copies of the bidder’s statement have been sent to all holders of bid class securities

9

The target must prepare a target’s statement.

See section 638 for content of statement

10

The target must send a copy of the target’s statement to the relevant securities exchange.

Within 14 days after the announcement is made

11

The target must send to the bidder:

·    a copy of the target’s statement; and

·    a copy of any other document that was sent with the target’s statement to the relevant securities exchange.

To be done on the day the target sends a copy of the target’s statement to the securities exchange

12

The target must lodge with ASIC:

·    a copy of the target’s statement; and

·    a copy of any other document that was sent with the target’s statement to the relevant securities exchange.

To be done on the day the target sends a copy of the target’s statement to the securities exchange

13

The target must send each holder of bid class securities:

·    a copy of the target’s statement; and

·    a copy of any other document that was sent with the target’s statement to the relevant securities exchange.

Within 14 days after the announcement is made

Sections 648B and 648C provide for the manner in which documents may be sent to holders.

14

The bidder must make offers for the securities under the bid through the relevant securities exchange.

To be done on the next day after the end of the 14 day period referred to in item 13.

If the bidder does not make the offers at that time, the bidder contravenes this section.

Item 2 of the table in section 611 covers offers made by the bidder on market during the 14 day period between the announcement and the making of the offers under the bid



 

Division 2 The bidder’s statement

636   Bidder’s statement content

             (1)  A bidder’s statement must include the following:

                     (a)  the identity of the bidder;

                     (b)  the date of the statement;

                     (c)  if the target is a company or body—details of the bidder’s intentions regarding:

                              (i)  the continuation of the business of the target; and

                             (ii)  any major changes to be made to the business of the target, including any redeployment of the fixed assets of the target; and

                            (iii)  the future employment of the present employees of the target;

                     (d)  if the target is a managed investment scheme—details of the bidder’s intentions regarding:

                              (i)  the continued operation of the scheme; and

                             (ii)  any major changes to be made to the operation of the scheme, including any redeployment of scheme property; and

                            (iii)  any plans to remove the current responsible entity and appoint a new responsible entity;

                     (e)  for an off-market bid—a statement that the bidder’s statement has been lodged with ASIC but that ASIC takes no responsibility for the content of the statement;

                      (f)  in relation to the cash consideration (if any) offered under the bid—details of:

                              (i)  the cash amounts (if any) held by the bidder for payment of the consideration; and

                             (ii)  the identity of any other person who is to provide, directly or indirectly, cash consideration from that person’s own funds; and

                            (iii)  any arrangements under which cash will be provided by a person referred to in subparagraph (ii);

                     (g)  if any securities are offered as consideration under the bid and the bidder is:

                              (i)  the body that has issued or will issue the securities; or

                             (ii)  a person who controls that body;

                            all material that would be required for a prospectus for an offer of those securities by the bidder under section 710 to 713;

                     (h)  if the bidder or an associate provided, or agreed to provide, consideration for a security in the bid class under a purchase or agreement during the 4 months before the date of the bid—the following information about the consideration:

                              (i)  to the extent to which the consideration is a cash sum—the amount per security of the cash sum;

                             (ii)  to the extent to which the consideration is quoted securities—the market price per security of those securities;

                            (iii)  to the extent to which the consideration is neither a cash sum nor a quoted security—the value per security of that consideration;

                      (i)  if, during the period of 4 months before the date of the bid, the bidder or an associate gave, or offered to give or agreed to give a benefit to another person and the benefit was likely to induce the other person, or an associate, to:

                              (i)  accept an offer under the bid; or

                             (ii)  dispose of securities in the bid class;

                            and the benefit is not offered to all holders of securities in the bid class under the bid—details of the benefit;

                      (j)  if the bid is to extend to securities that come to be in the bid class during the offer period due to the conversion of or exercise of rights attached to other securities (see subsection 617(2))—a statement to that effect;

                     (k)  for an off-market bid—the following details in relation to each class of securities in the target:

                              (i)  the total number of securities in the class;

                             (ii)  the number of securities in the class that the bidder had a relevant interest in immediately before the first offer is sent (expressed as a number of securities or as a percentage of the total number of securities in the class);

                      (l)  for an off-market bid—the bidder’s voting power in the company;

                    (m)  any other information that:

                              (i)  is material to the making of the decision by a holder of bid class securities whether to accept an offer under the bid; and

                             (ii)  is known to the bidder; and

                            (iii)  does not relate to the value of securities offered as consideration under the bid.

The information that the bidder must disclose under subparagraph (k)(i) and paragraph (l) must be only as up-to-date as it is reasonable to expect in the circumstances. The bidder does not have to disclose information under paragraph (m) if it would be unreasonable to require the bidder to do so because the information had previously been disclosed to the holders of bid class securities.

Note:          Paragraph (b)—See subsection 637(2) for the date of the statement.

Expert’s report on non-cash consideration provided for bid class securities in last 4 months

             (2)  If the bidder’s statement includes details of the value per share of consideration under subparagraph (1)(h)(iii), the statement must include, or be accompanied by, a report by an expert that states whether, in the expert’s opinion, the value stated is fair and reasonable and gives the reasons for forming that opinion.

Note:          Subsections 648A(2) and (3) provide for the independence of the expert and disclosure of any association between the bidder and the expert or the target and the expert. A contravention of one of those subsections results in the bidder’s statement not complying with this subsection.

Consent of person to whom statement attributed

             (3)  The bidder’s statement may only include, or be accompanied by, a statement by a person, or a statement said in the bidder’s statement to be based on a statement by a person, if:

                     (a)  the person has consented to the statement being included in the bidder’s statement, or accompanying it, in the form and context in which it is included; and

                     (b)  the bidder’s statement states that the person has given this consent; and

                     (c)  the person has not withdrawn this consent before the bidder’s statement is lodged with ASIC.

             (4)  The bidder must keep the consent.

637   Bidder’s statement formalities

Approval

             (1)  The copy of the bidder’s statement that is lodged with ASIC must be approved by:

                     (a)  for a bidder that is a body corporate:

                              (i)  if the consideration offered under the bid is a cash sum only—a resolution passed by the directors of the bidder; or

                             (ii)  otherwise—a unanimous resolution passed by all the directors of the bidder; or

                     (b)  for a bidder who is an individual—the bidder.

             (2)  The bidder’s statement must be dated. The date is the date on which it is lodged with ASIC.



 

Division 3 The target’s response

638   Target’s statement content

General requirement

             (1)  A target’s statement must include all the information that holders of bid class securities and their professional advisers would reasonably require to make an informed assessment whether to accept the offer under the bid. The statement must contain this information:

                     (a)  only to the extent to which it is reasonable for investors and their professional advisers to expect to find the information in the statement; and

                     (b)  only if the information is known to any of the directors of the target.

             (2)  In deciding what information should be included under subsection (1), have regard to:

                     (a)  the nature of the bid class securities; and

                     (b)  if the bid class securities are interests in a managed investment scheme—the nature of the scheme; and

                     (c)  the matters that the holders of bid class securities may reasonably be expected to know; and

                     (d)  the fact that certain matters may reasonably be expected to be known to their professional advisers; and

                     (e)  the time available to the target to prepare the statement.

Director’s recommendations

             (3)  A target’s statement must contain a statement by each director of the target:

                     (a)  recommending that offers under the bid be accepted or not accepted, and giving reasons for the recommendation; or

                     (b)  giving reasons why a recommendation is not made.

             (4)  The statement under subsection (3) must be made by:

                     (a)  if the target is under administration—the liquidator or administrator; or

                     (b)  if the target has executed a deed of company arrangement that has not yet terminated—the deed’s administrator.

Consent of person to whom statement attributed

             (5)  The target’s statement may only include, or be accompanied by, a statement by a person, or a statement said in the target’s statement to be based on a statement by a person, if:

                     (a)  the person has consented to the statement being included in the target’s statement, or accompanying it, in the form and context in which it is included; and

                     (b)  the target’s statement states that the person has given this consent; and

                     (c)  the person has not withdrawn this consent before the target’s statement is lodged with ASIC.

             (6)  The target must keep the consent.

639   Target’s statement formalities

Approval

             (1)  The copy of the target’s statement that is lodged with ASIC must be approved by:

                     (a)  if paragraphs (b) and (c) do not apply—a resolution passed by the directors of the target; or

                     (b)  for a target that is under administration—the liquidator or administrator; or

                     (c)  for a target that has executed a deed of company arrangement that has not yet terminated—the deed’s administrator.

Date

             (2)  The target’s statement must be dated. The date is the date on which it is lodged with ASIC.

640   Expert’s report to accompany target’s statement if bidder connected with target

             (1)  If:

                     (a)  the bidder’s voting power in the target is 30% or more; or

                     (b)  for a bidder who is, or includes, an individual—the bidder is a director of the target; or

                     (c)  for a bidder who is, or includes, a body corporate—a director of the bidder is a director of the target;

a target’s statement given in accordance with section 638 must include, or be accompanied by, a report by an expert that states whether, in the expert’s opinion, the takeover offers are fair and reasonable and gives the reasons for forming that opinion.

Note:          Subsections 648A(2) and (3) provide for the independence of the expert and disclosure of any association between the target and the expert or the bidder and the expert. A contravention of one of those subsections results in the target’s statement not complying with this subsection.

             (2)  In determining whether the bidder’s voting power in the target is 30% or more, calculate the bidder’s voting power at the time the bidder’s statement is sent to the target.

641   Target must inform bidder about securities holdings

Requirement to inform bidder and information that must be given

             (1)  If the bidder has given a bidder’s statement to the target and requested the target to give the bidder information in accordance with this section, the target must inform the bidder of:

                     (a)  the name and address of each person who, at a time specified by the bidder under subsection (2), held securities:

                              (i)  in the bid class; or

                             (ii)  convertible into securities in the bid class; and

                     (b)  the type, and number of each type, of those securities held by the person at the specified time.

However, the target does not need to give information to the bidder about a person or their holding of securities unless the target knows the person’s name.

Time at which target’s information must be correct

             (2)  The bidder’s request must specify a day as at which the information must be correct. The day must be one that occurs after the day on which the bidder makes the request unless the target agrees to it being the day on which the bidder makes the request.

Form in which target must provide information

             (3)  The target must give the information to the bidder:

                     (a)  in the form that the bidder requests; or

                     (b)  if the target is unable to comply with the request—in writing.

             (4)  If the target must give the information to the bidder in electronic form, the information must be readable but the information need not be formatted for the bidder’s preferred operating system.

Fee for provision of information

             (5)  The target may require the bidder to pay an amount, not exceeding the prescribed amount, for the provision of the information to the bidder.

Time by which target must provide information

             (6)  The target must give the information to the bidder no later than the latest of the following times:

                     (a)  the end of the second day after the day on which the bidder requested the information; or

                     (b)  the end of the next day after the day as at which the information must be correct; or

                     (c)  the time when the target receives the amount mentioned in subsection (5).

642   Expenses of directors of target companies

             (1)  If the target is a company or body, the directors of the target have a right to recover from the target any expenses they reasonably incur in the interest of members of the target and in relation to the takeover bid. The directors have this right regardless of anything contained in the target’s constitution (if any).

             (2)  If the target is a managed investment scheme, the responsible entity for the scheme has a right to recover from scheme property any expenses it reasonably incurs in the interest of members of the scheme and in relation to the takeover bid. The responsible entity has this right regardless of anything contained in the scheme’s constitution.



 

Division 4 Updating and correcting the bidder’s statement and target’s statement

643   Supplementary bidder’s statement

                   If a bidder becomes aware of:

                     (a)  a misleading or deceptive statement in the bidder’s statement; or

                     (b)  an omission from the bidder’s statement of information required by section 636; or

                     (c)  a new circumstance that:

                              (i)  has arisen since the bidder’s statement was lodged; and

                             (ii)  would have been required by section 636 to be included in the bidder’s statement if it had arisen before the bidder’s statement was lodged;

that is material from the point of view of a holder of bid class securities, the bidder must prepare a supplementary bidder’s statement that remedies this defect.

Note 1:       The bidder must then send and lodge the supplementary bidder’s statement in accordance with section 647.

Note 2:       Section 670A makes it an offence to give a bidder’s statement after the bidder has become aware of a misleading or deceptive statement, omission or new circumstance that is material from the point of view of a holder of securities to whom the statement is given (unless the deficiency is corrected).

Note 3:       The power to issue a supplementary bidder’s statement is not limited to the situations dealt with in this section.

Note 4:       This section applies to a bidder’s statement that has already been previously supplemented.

644   Supplementary target’s statement

                   If a target becomes aware of:

                     (a)  a misleading or deceptive statement in the target’s statement; or

                     (b)  an omission from the target’s statement of information required by section 638; or

                     (c)  a new circumstance that:

                              (i)  has arisen since the target’s statement was lodged; and

                             (ii)  would have been required by section 638 to be included in the target’s statement if it had arisen before the target’s statement was lodged;

that is material from the point of view of a holder of bid class securities, the target must prepare a supplementary target’s statement that remedies this defect.

Note 1:       The target must then send and lodge the supplementary target’s statement in accordance with section 647.

Note 2:       Section 670A makes it an offence to give a target’s statement after the target has become aware of a misleading or deceptive statement, omission or new circumstance that is material from the point of view of a holder of securities to whom the statement is given (unless the deficiency is corrected).

Note 3:       The power to issue a supplementary target’s statement is not limited to the situations dealt with in this section.

Note 4:       This section applies to a target’s statement that has already been previously supplemented.

645   Form of supplementary statement

Identity as a supplementary statement

             (1)  At the beginning of a supplementary bidder’s or target’s statement there must be:

                     (a)  a statement that it is a supplementary statement; and

                     (b)  an identification of the statement it supplements; and

                     (c)  an identification of any previous supplementary statements lodged with ASIC in relation to the bid; and

                     (d)  a statement that it is to be read together with the statement it supplements and any previous supplementary statements.

Approval of supplementary bidder’s statement

             (2)  The copy of the supplementary bidder’s statement that is lodged with ASIC must be approved by:

                     (a)  for a bidder that is a body corporate:

                              (i)  if the consideration offered under the bid is a cash sum only—a resolution passed by the directors of the bidder; or

                             (ii)  otherwise—a unanimous resolution passed by all the directors of the bidder; or

                     (b)  for a bidder who is an individual—the bidder.

Approval of supplementary target’s statement

             (3)  The copy of a supplementary target’s statement that is lodged with ASIC must be approved by:

                     (a)  if paragraphs (b) and (c) do not apply—a resolution passed by the directors of the target; or

                     (b)  for a target that is under administration—the liquidator or administrator; or

                     (c)  for a target that has executed a deed of company arrangement that has not yet terminated—the deed’s administrator.

Date

             (4)  A supplementary statement must be dated. The date is the date on which it is lodged with ASIC.

646   Consequences of lodging a supplementary statement

                   If a supplementary statement is lodged with ASIC, for the purposes of the application of this Chapter and Chapter 6B to events that occur after the lodgment, the bidder’s or target’s statement is taken to be the original statement together with the supplementary statement.

647   To whom supplementary statement must be sent

             (1)  A supplementary bidder’s statement must be sent to the target as soon as practicable.

             (2)  A supplementary target’s statement must be sent to the bidder as soon as practicable.

             (3)  Either kind of supplementary statement must as soon as practicable be:

                     (a)  lodged with ASIC; and

                     (b)  if the bid class securities are quoted and the target is listed—sent to each relevant securities exchange that has a stock market on which the target’s securities are quoted; and

                     (c)  if the bid is an off-market bid and the bid class securities are not quoted—sent to all holders of bid class securities who have not accepted an offer under the bid.

Note:          Sections 648B and 648C provide for the manner in which documents may be sent to holders.



 

Division 5 General rules on takeover procedure

Subdivision A Experts’ reports

648A   Experts’ reports

             (1)  If the bidder or target obtains 2 or more reports each of which could be used for the purposes of subparagraph 636(1)(h)(iii) or subsection 640(1), the bidder’s or target’s statement must be accompanied by a copy of each report.

             (2)  The expert must be someone other than an associate of the bidder or target.

             (3)  The report must set out details of:

                     (a)  any relationship between the expert and:

                              (i)  the bidder or an associate of the bidder; or

                             (ii)  the target or an associate of the target;

                            including any circumstances in which the expert gives them advice, or acts on their behalf, in the proper performance of the functions attaching to the expert’s professional capacity or business relationship with them; and

                     (b)  any financial or other interest of the expert that could reasonably be regarded as being capable of affecting the expert’s ability to give an unbiased opinion in relation to the matter being reported on; and

                     (c)  any fee, payment or other benefit (whether direct or indirect) that the expert has received or will or may receive in connection with making the report.

Note:          If the statement includes, or is accompanied by, the report, it must state that the expert has consented to this being done (see subsections 636(3) and 638(5)).

Subdivision B Sending documents to holders of securities

648B   Address at which bidder may send documents to holders of securities

                   The bidder may send a document to a holder of securities for the purposes of this Chapter at the address shown for the holder in the information given to the bidder by the target under section 641. This section does not limit the address to which the document may be sent to the holder.

Note:          Section 109X makes general provision for service of documents.

648C   Manner of sending documents to holders of securities

                   If a document must be sent to the holder of securities under this Chapter, the document must be sent:

                     (a)  if the document is to be sent to the holder outside Australia—by pre-paid airmail post or by courier; or

                     (b)  if the document is to be sent to the holder in Australia—by pre-paid ordinary post or by courier.

Subdivision C Effect of proportional takeover approval provisions

648D   Constitution may contain proportional takeover approval provisions

             (1)  Subject to this Subdivision, the constitution of a company may contain provisions to the effect that, if offers are made under a proportional takeover bid for securities of the company:

                     (a)  the registration of a transfer giving effect to a takeover contract for the bid is prohibited unless and until a resolution (an approving resolution ) to approve the bid is passed in accordance with the provisions; and

                     (b)  a person (other than the bidder or an associate of the bidder) who, as at the end of the day on which the first offer under the bid was made, held bid class securities is entitled to vote on an approving resolution; and

                     (c)  an approving resolution is to be voted on in whichever of the following ways is specified in the provisions:

                              (i)  at a meeting, convened and conducted by the company, of the persons entitled to vote on the resolution;

                             (ii)  by means of a postal ballot conducted by the company in accordance with a procedure set out in the provisions;

                            or, if the provisions so provide, in whichever of those ways is determined by the directors of the company; and

                     (d)  an approving resolution that has been voted on is taken to have been passed if the proportion that the number of votes in favour of the resolution bears to the total number of votes on the resolution is greater than the proportion specified in the provisions, and otherwise is taken to have been rejected.

The proportion specified under paragraph (d) must not exceed 50%.

Note:          Section 9 defines proportional takeover bid . See paragraph 618(1)(b).

             (2)  To be effective, an approving resolution in relation to a proportional takeover bid must be passed before the approving resolution deadline . The deadline is the 14th day before the last day of the bid period.

Note:          In certain circumstances, an approving resolution will be taken to have been passed (see subsection 648E(3)).

             (3)  Except to the extent to which a company’s constitution provides otherwise:

                     (a)  the provisions that apply to a general meeting of the company apply, with such modifications as the circumstances require, to a meeting convened under the company’s proportional takeover approval provisions; and

                     (b)  those provisions apply as if the meeting convened under the proportional takeover provisions were a general meeting of the company.

The provisions referred to in paragraph (a) may be the provisions of a law, provisions of the company’s constitution or any other provisions.

648E   Resolution to be put if proportional bid made

             (1)  If:

                     (a)  a company’s constitution contains proportional takeover approval provisions; and

                     (b)  offers are made under a proportional bid for a class of the company’s securities;

then:

                     (c)  the company’s directors must ensure that a resolution to approve the bid is voted on in accordance with those provisions before the approving resolution deadline; and

                     (d)  if the directors fail to ensure that a resolution of that kind is voted on before the deadline, each of the directors contravenes this subsection.

Note:          Subsection 648D(2) sets the approving resolution deadline.

             (2)  If a resolution to approve the bid is voted on in accordance with the proportional takeover approval provisions before the approving resolution deadline, the company must, on or before the deadline, give:

                     (a)  the bidder; and

                     (b)  if the company is listed—each relevant securities exchange;

a written notice stating that a resolution to approve the bid has been voted on and whether the resolution was passed or rejected.

             (3)  If no resolution to approve the bid has been voted on in accordance with the proportional takeover approval provisions as at the end of the day before the approving resolution deadline, a resolution to approve the bid is taken, for the purposes of those provisions, to have been passed in accordance with those provisions.

648F   Effect of rejection of approval resolution

                   If a resolution to approve the bid is voted on, in accordance with the proportional takeover approval provisions, before the approving resolution deadline and is rejected:

                     (a)  despite section 652A:

                              (i)  all offers under the bid that have not been accepted as at the end of deadline; and

                             (ii)  all offers under the bid that have been accepted, and from whose acceptance binding contracts have not resulted, as at the end of the deadline;

                            are taken to be withdrawn at the end of the deadline; and

                     (b)  as soon as practicable after the deadline, the bidder must return to each person who has accepted an offer referred to in subparagraph (a)(ii) any documents that the person sent the bidder with the acceptance of the offer; and

                     (c)  the bidder:

                              (i)  is entitled to rescind; and

                             (ii)  must rescind as soon as practicable after the deadline;

                            each binding takeover contract for the bid; and

                     (d)  a person who has accepted an offer made under the bid is entitled to rescind their takeover contract.

648G   Including proportional takeover provisions in constitution

             (1)  A company’s proportional takeover approval provisions, unless sooner omitted from the constitution of the company, cease to apply at the end of:

                     (a)  unless paragraph (b) or (c) applies—3 years;

                     (b)  if the constitution provides that the provisions apply for a specified period of less than 3 years and the provisions have not been renewed—the specified period; or

                     (c)  if the provisions have been renewed on at least one occasion and the resolution, or the most recent resolution, renewing the provisions states that the provisions are renewed for a specified period of less than 3 years—the specified period.

             (2)  The period referred to in subsection (1) starts:

                     (a)  if the provisions were contained in the company’s constitution when it was incorporated or formed and have not been renewed—at that time; or

                     (b)  if the provisions were inserted in the company’s constitution and have not been renewed—when the provisions were inserted; or

                     (c)  if the provisions have been renewed on at least one occasion—when the provisions were renewed, or last renewed.

             (3)  When the provisions cease to apply, the company’s constitution is, by force of this subsection, altered by omitting the provisions.

             (4)  A company may renew its proportional takeover approval provisions. The provisions are to be renewed in the same manner as that in which the company could alter its constitution to insert proportional takeover approval provisions.

             (5)  With every notice that:

                     (a)  specifies the intention to propose:

                              (i)  a resolution to alter a company’s constitution by inserting proportional takeover approval provisions; or

                             (ii)  a resolution to renew a company’s proportional takeover approval provisions; and

                     (b)  is sent to a person who is entitled to vote on the proposed resolution;

the company must send a statement that:

                     (c)  explains the effect of the proposed provisions, or of the provisions proposed to be renewed; and

                     (d)  explains the reasons for proposing the resolution and sets out the factual matters and principles underlying those reasons; and

                     (e)  states whether, as at the day on which the statement is prepared, any of the directors of the company is aware of a proposal by a person to acquire, or to increase the extent of, a substantial interest in the company and, if so, explains the extent (if any) to which the proposal has influenced the decision to propose the resolution; and

                      (f)  for a proposed resolution to renew proportional takeover approval provisions—reviews both the advantages, and disadvantages, of the provisions proposed to be renewed for:

                              (i)  the directors; and

                             (ii)  the company’s members;

                            during the period during which the provisions have been in effect; and

                     (g)  discusses both the potential advantages, and the potential disadvantages, of the proposed provisions, or of the provisions proposed to be renewed, for:

                              (i)  the directors; and

                             (ii)  the company’s members.

             (6)  If, on a particular day, a company purports to:

                     (a)  alter its constitution by inserting proportional takeover approval provisions; or

                     (b)  renew its proportional takeover approval provisions;

then:

                     (c)  holders who together hold not less than 10% (by number) of the issued securities in a class of securities in the company to which the provisions apply may, within 21 days after that day, apply to the Court to have the purported alteration or renewal set aside to the extent to which it relates to that class; and

                     (d)  unless and until an application made under paragraph (c) is finally determined by the making of an order setting aside the purported alteration or renewal to that extent, the company is taken for all purposes (other than the purposes of an application of that kind):

                              (i)  to have validly altered its constitution by inserting the provisions referred to in paragraph (a) applying to that class; or

                             (ii)  to have validly renewed the provisions referred to in paragraph (b) applying to that class.

             (7)  An application under paragraph (6)(c) may be made, on behalf of the holders entitled to make the application, by a holder or holders appointed by them in writing.

             (8)  On an application under paragraph (6)(c), the Court may make an order setting aside the purported alteration or renewal to the extent to which it applies to that class if it is satisfied that it is appropriate in all the circumstances to do so. Otherwise the Court must dismiss the application.

             (9)  Within 14 days after the day on which the Court makes an order of the kind referred to in subsection (8) in relation to a company, the company must lodge a copy of the order with ASIC.

648H   Effect of Subdivision

                   This Subdivision applies notwithstanding anything contained in:

                     (a)  the business rules or listing rules of a securities exchange; or

                     (b)  the constitution of a company; or

                     (c)  any agreement.