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Corporations Bill 2001

Part 6.6 Variation of offers

Division 1 Market bids

649A   General

                   A bidder may only vary the offers under a market bid in accordance with section 649B or 649C.

Note:          ASIC may allow other variations under section 655A.

649B   Market bids—raising bid price

                   The bidder may increase the current market bid price. They may not do so, however, during the last 5 trading days of the relevant securities exchange in the offer period.

649C   Market bids—extending the offer period

             (1)  The bidder may extend the offer period. The extension must be announced to the relevant securities exchange at least 5 trading days of the exchange before the end of the offer period. However, the announcement may be made up to the end of the offer period if during those 5 trading days:

                     (a)  another person lodges with ASIC a bidder’s statement for a takeover bid for securities in the bid class; or

                     (b)  another person announces a takeover bid for securities in the bid class; or

                     (c)  another person makes offers under a takeover bid for securities in the bid class; or

                     (d)  the consideration for offers under another takeover bid for securities in the bid class is improved.

The offer period is extended by having the extension announced to the relevant securities exchange.

Note:          Section 624 provides for an automatic extension of the bid period in certain circumstances.

             (2)  On the day on which the announcement is made, the bidder must:

                     (a)  give the target and the relevant securities exchange a notice setting out the terms of the announcement; and

                     (b)  lodge a notice setting out the terms of the announcement with ASIC.



 

Division 2 Off-market bids (express variation by bidder)

650A   General

             (1)  A bidder may only vary the offers under an off-market bid in accordance with section 650B, 650C or 650D.

Note:          ASIC may allow other variations under section 655A.

             (2)  If the bidder varies the offer under an off-market bid in accordance with section 650B, 650C or 650D, the bidder must vary all unaccepted offers under the bid in the same way.

Note:          Subsections 650B(2) and (3) deal with the effect of a variation on takeover contracts that have already resulted from acceptances of offers under the bid when the variation is made.

650B   Off-market bids—consideration offered

Improving the consideration offered

             (1)  The bidder may vary the offers made under the bid to improve the consideration offered:

                     (a)  by increasing a cash sum offered; or

                     (b)  by increasing the number of securities offered; or

                     (c)  by increasing the rate of interest payable under debentures offered; or

                     (d)  by increasing the amount or value of debentures offered; or

                     (e)  by increasing the number of unissued securities that may be acquired under options offered; or

                      (f)  by offering a cash sum in addition to securities; or

                     (g)  if the securities being acquired include shares to which rights to accrued dividends are attached—by giving the holders the right to:

                              (i)  retain the whole or a part of the dividend; or

                             (ii)  be paid an amount equal to the amount of the dividend;

                            in addition to the consideration already offered; or

                     (h)  offering an additional alternative form of consideration.

Note:          If the bidder increases the consideration during the last 7 days of the offer period, subsection 624(2) extends the offer period by a further 14 days.

Effect of increase in consideration on offers already accepted

             (2)  Improving the consideration has the effects set out in the following table on the rights of a person who has already accepted an offer when the variation is made.

 

Effect of improving consideration

[operative]

 

Improvement

Effect on person who has already accepted bid offer

1

improvement of the only form of consideration being offered

entitled to the improved consideration

2

2 or more forms of consideration offered and all forms improved by the same factor or percentage

entitled to the improvement in the form of consideration accepted

3

2 or more forms of consideration offered and improvement in the consideration is identical for all forms

entitled to the improvement in the form of consideration accepted

4

addition of a new form of consideration

entitled to make a fresh election as to the form of consideration to be taken

5

any other improvement

entitled to make a fresh election as to the form of consideration to be taken

The person is entitled to receive the improved consideration immediately, or immediately after the exercise of the election.

Fresh election as to the form of consideration

             (3)  If a person who has already accepted an offer has the right to make a fresh election as to the form of consideration to be taken, the bidder must send the person as soon as practicable after the variation a written notice informing them about their right to make the election.

Note 1:       Section 651B says how the election is to be exercised.

Note 2:       Sections 648B and 648C provide for the manner in which documents may be sent to holders.

650C   Off-market bids—extension of offer period

             (1)  A bidder making an off-market bid may extend the offer period at any time before the end of the offer period.

             (2)  If the bid is subject to a defeating condition, the bidder may extend the offer period after the publication of the notice under subsection 630(3) only if one of the following happens after the publication:

                     (a)  another person lodges with ASIC a bidder’s statement for a takeover bid for securities in the bid class;

                     (b)  another person announces a takeover bid for securities in the bid class;

                     (c)  another person makes offers under a takeover bid for securities in the bid class;

                     (d)  the consideration for offers under another takeover bid for securities in the bid class is improved.

Note:          Section 624 says how long the total offer period can be.

650D   Off-market bids—method of making variation

Variation to be made by notice to the target and holders

             (1)  To vary offers under an off-market bid, the bidder must:

                     (a)  prepare a notice that:

                              (i)  sets out the terms of the proposed variation; and

                             (ii)  if the bid is subject to a defeating condition and the proposed variation postpones for more than 1 month the time by which the bidder must satisfy their obligations under the bid—informs people about the right to withdraw acceptances under section 650E; and

                     (b)  lodge the notice with ASIC; and

                     (c)  after the notice is lodged, give the notice to:

                              (i)  the target; and

                             (ii)  everyone to whom offers were made under the bid.

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

             (2)  A person must be sent a copy of the notice under subparagraph (1)(c)(ii) even if they have already accepted the offer. However, they need not be sent a copy if:

                     (a)  the variation merely extends the offer period; and

                     (b)  the bid is not subject to a defeating condition at the time the notice is given to the target.

             (3)  A notice under subsection (1) must be signed by:

                     (a)  if the bidder is, or includes, an individual—the individual; and

                     (b)  if the bidder is, or includes, a body corporate with 2 or more directors—not fewer than 2 of the directors who are authorised to sign the notice by a resolution passed at a directors’ meeting; and

                     (c)  if the bidder is, or includes, a body corporate that has only one director—that director.

             (4)  A copy of a notice given to a person under subparagraph (1)(c)(ii) must include a statement that:

                     (a)  a copy of the notice was lodged with ASIC on a specified date; and

                     (b)  ASIC takes no responsibility for the contents of the notice.

650E   Right to withdraw acceptance

             (1)  A person who accepts an offer made under an off-market bid may withdraw their acceptance of the offer if:

                     (a)  the bid is subject to a defeating condition; and

                     (b)  the bidder varies the offers under the bid in a way that postpones for more than 1 month the time when the bidder has to meet their obligations under the bid; and

                     (c)  the person is entitled to be given a notice of the variation under subsection 650D(1).

             (2)  To withdraw their acceptance, the person must:

                     (a)  give the bidder notice within 1 month beginning on the day after the day on which the copy of the notice of the variation was received; and

                     (b)  return any consideration received by the person for accepting the offer.

             (3)  A notice under paragraph (2)(a):

                     (a)  if it relates to securities that are entered on an SCH subregister—must be in an electronic form approved by the SCH business rules for the purposes of this Part; or

                     (b)  if it relates to shares that are not entered on an SCH subregister—must be in writing.

             (4)  To return consideration that includes securities, the person must:

                     (a)  if the securities are entered on an SCH subregister—take the action that the SCH business rules require in relation to the return of the securities; or

                     (b)  otherwise—give the bidder any transfer documents needed to effect the return of securities.

             (5)  If the person withdraws their acceptance, the bidder must:

                     (a)  take any action that the SCH business rules require in relation to any of the securities to which the acceptance relates that are entered on an SCH subregister; and

                     (b)  return any documents that the person sent the bidder with the acceptance of the offer;

within 14 days after:

                     (c)  if the person does the things referred to in subsection (2) on the same day—that day; or

                     (d)  if the person does those things on different days—the last of those days.

             (6)  If under this section a person returns to a company any certificates (together with any necessary transfer documents) in respect of the securities issued by the company, the company must cancel those securities as soon as possible. Any reduction in share capital is authorised by this subsection.

650F   Freeing off-market bids from defeating conditions

             (1)  If the offers under an off-market bid are subject to a defeating condition, the bidder may free the offers, and the takeover contracts, from the condition only by giving the target a notice declaring the offers to be free from the condition in accordance with this section:

                     (a)  if the condition is that the bidder may withdraw unaccepted offers if an event or circumstance referred to in subsection 652C(1) or (2) occurs in relation to the target—not later than 3 business days after the end of the offer period; or

                     (b)  in any other case—not less than 7 days before the end of the offer period.

             (2)  The notice must:

                     (a)  state that the offers are free from the condition; and

                     (b)  specify the bidder’s voting power in the company.

             (3)  The notice must be:

                     (a)  if the securities in the bid class are quoted—given to the relevant securities exchange; and

                     (b)  if those securities are not quoted—lodged with ASIC.

650G   Contracts and acceptances void if defeating condition not fulfilled

                   All takeover contracts, and all acceptances that have not resulted in binding takeover contracts, for an off-market bid are void if:

                     (a)  offers made under the bid have at any time been subject to a defeating condition; and

                     (b)  the bidder has not declared the offers to be free from the condition within the period before the date applicable under subsection 630(1) or (2); and

                     (c)  the condition has not been fulfilled at the end of the offer period.

A transfer of securities based on an acceptance or contract that is void under this section must not be registered.



 

Division 3 Off-market bids (automatic variations)

651A   Off-market bid—effect on bid consideration of purchases made outside bid

Effect of purchases outside bid on offers made under the bid

             (1)  The offers made under an off-market bid, and the takeover contracts, are varied under this section if:

                     (a)  the bidder purchases securities in the bid class outside the bid during the bid period; and:

                     (b)  the consideration for that purchase consists solely of a cash sum; and

                     (c)  either:

                              (i)  the consideration, or 1 of the forms of consideration, payable under the bid consists of a cash sum only and the consideration referred to in paragraph (b) is higher than the cash sum payable for the securities under the bid; or

                             (ii)  a cash sum only is not the consideration, or 1 of the forms of consideration, payable under the bid.

Note 1:       Section 9 defines takeover contract .

Note 2:       The effect of section 623 is that the purchase outside the bid has to be made through an on-market transaction (see subsection 623(1) and paragraph 623(3)(b)).

Effect on unaccepted cash offers

             (2)  If:

                     (a)  one of the forms of consideration offered to a person under an off-market bid is a cash sum only; and

                     (b)  the person has not accepted the offer before the purchase outside the bid occurs;

the cash sum is taken to be increased to the highest outside purchase price before the offer is accepted.

Effect on cash offers already accepted

             (3)  The consideration payable for each security covered by a takeover contract arising from the acceptance of an offer for a cash sum only is increased to the highest outside purchase price. If the person who accepted the offer has already received the whole or any part of the consideration under the contract, they are entitled to receive the increase in consideration immediately.

Effect on non-cash offers accepted at any time during bid period

             (4)  If:

                     (a)  a person accepts an offer under a bid at any time during the bid period; and

                     (b)  the consideration paid or provided, or to be paid or provided, under the takeover contract arising from the acceptance of the offer does not consist of a cash sum only;

then:

                     (c)  the person may elect to take as consideration for each security covered by the takeover contract a cash sum equal to the highest outside purchase price instead of the consideration they originally accepted; and

                     (d)  the bidder must give the person a written notice of their right to make the election within 14 days after the end of the offer period.

Note:          Section 651B says how the election is to be exercised.

651B   How to make an election for new forms of consideration

             (1)  An election under section 650B or 651A to take a new form of consideration must be made:

                     (a)  by written notice to the bidder; and

                     (b)  within 1 month after the person receives the notice from the bidder of their right to make the election.

             (2)  The person becomes entitled to the new form of consideration if they:

                     (a)  make the election; and

                     (b)  return to the bidder:

                              (i)  any consideration they have already received; and

                             (ii)  any necessary transfer documents.

651C   Returning securities as part of election

                   If under section 651B a person returns to a company any certificates (together with any necessary transfer documents) in respect of the securities issued by a company, the company must cancel those securities as soon as possible.