This unofficial version of the Takeovers Code includes the amendments made by the Takeovers Code Approval Amendment Regulations 2007. The Code as amended came into force on 1 July 2007. Part 3
Specific requirements for exceptions to
fundamental rule
Contents
Subpart 1-Full offers
Full offer
(1) An offer may be made under this code for all the voting securities of the target company not already held by the offeror.
(2) A full offer must include offers in respect of all the securities in each class of equity securities, whether voting or non-voting, of the target company (other than those that are already held by the offeror).
(3) If there is more than 1 class of voting securities included in a full offer, the consideration and terms offered for each class of voting securities must be fair and reasonable as between the classes of voting securities.
(4) If non-voting securities are included in a full offer, the consideration and terms offered for non-voting securities must be fair and reasonable in comparison with the consideration and terms offered for voting securities and as between classes of non-voting securities.
Subpart 2- Partial offers
General provisions
Partial offer
(1) An offer may be made under this code for less than all the voting securities of a target company.
(2) A partial offer must be extended to all holders of voting securities of the target company other than the offeror.
(3) If there is only 1 class of voting securities of the target company, a partial offer must be made for a specified percentage of the voting securities of the target company not already held or controlled by the offeror.
(4) If there is more than 1 class of voting securities of the target company, a partial offer must be made for a specified percentage of the voting securities of each class not already held or controlled by the offeror, and such specified percentage must be the same percentage in respect of each class.
(5) The consideration and terms offered for each class of voting securities of the target company must be fair and reasonable as between the classes of voting securities.
When offeror does not hold or control more than 50% of voting rights
(1) If, on the date of a partial offer, the offeror does not hold or control more than 50% of the voting rights in the target company, the partial offer must be 1 only of the following:
(a) a partial offer for a specified percentage of the voting securities of each class not already held or controlled by the offeror that, when taken together with the voting securities already held or controlled by the offeror, confers more than 50% of the voting rights in the target company; or
(b) a partial offer for a specified percentage of the voting securities of each class not already held or controlled by the offeror that, when taken together with the voting securities already held or controlled by the offeror, confers 50% or less of the voting rights in the target company if approval is obtained in accordance with the following provisions:
(i) the takeover notice and the offer must include a statement that approval is sought under rule 10 of the Takeovers Code and that the offer is conditional on approval being obtained:
(ii) the offer must be accompanied by a separate approval document providing for the offeree to approve or object to the offeror making an offer for 50% or less of the voting rights in the target company:
(iii) approval under this rule is obtained if the offerees so approving hold more voting rights in the target company than are held by offerees so objecting:
(iv) for the purposes of subparagraph (iii), voting rights held by the offeror and its associates must be disregarded:
(v) for an approval or objection to be valid for the purposes of this rule, the completed approval document must be received by the target company or its agent before the expiration of the offer period.
(2) A target company, or its agent, that receives an approval or objection before the expiration of the offer period must, if requested by the offeror, send a copy of the approval or objection to the offeror within 2 days of its receipt.
Excess acceptances
Excess acceptances: application
If a partial offer is accepted in respect of more securities than those sought by the offeror, rules 12 and 13 apply.
Excess acceptances: 1 class of voting securities
(1) If there is only 1 class of voting securities included in the partial offer, the offeror must take up from each offeree the lesser of-
(a) the number of the offeree's securities that represents the specified percentage of the voting securities held by the offeree; or
(b) the number of securities in respect of which the offeree has accepted the offer.
(2) If the number of voting securities that the offeror takes up under subclause
(1) is less than the number of voting securities sought by the offeror under the offer, the offeror must acquire the further required voting securities by taking up, from each offeree with surplus acceptance voting securities, voting securities bearing the same proportion to the offeree's surplus acceptance voting securities as the further required voting securities bear to the total surplus acceptance voting securities.
(3) For the purposes of this rule and rule 13,-
further required voting securities means the balance of voting securities required by an offeror
surplus acceptance voting securities means the voting securities in respect of which an offer has been accepted, but that have not been taken up under subclause (1).
Excess acceptances: more than 1 class of voting securities
If there is more than 1 class of voting securities included in the partial offer,-
(a) rule 12 applies in respect of each class of voting securities separately; and
(b) if the application of paragraph (a) does not provide the offeror with the voting securities sought by the offeror under the partial offer, rule 12(2) and (3) applies (with any necessary modifications) in relation to the-
(i) total remaining surplus acceptance voting securities of all classes; and
(ii) total remaining further required voting securities of all classes needed to bring the voting rights acquired under the partial offer up to the total voting rights conferred by the voting securities sought under the partial offer; and
(c) if the voting securities confer different voting rights as between classes, the number of surplus acceptance voting securities taken up from each offeree under paragraph (b) must be calculated by reference to the-
(i) voting rights conferred by each remaining surplus acceptance voting security; and
(ii) voting rights conferred by the total remaining surplus acceptance voting securities; and
(iii) remaining voting rights sought under the partial offer.
Voting securities subject to disposition
The number of voting securities that may be disposed of by an offeree under a partial offer in accordance with the terms of the offer and this code must be determined by reference to the number of voting securities of each class under offer held by the offeree at the expiration of the offer period, as recorded in the securities register of the target company.
Subpart 3- Acquisitions and allotments
Notice of meeting
Notice of meeting: acquisition of voting securities
The notice of meeting containing the proposed resolution in respect of an acquisition of voting securities referred to in rule 7(c) must contain, or be accompanied by,-
(a) the identity of the persons acquiring and disposing of the voting securities; and
(b) particulars of the voting securities to be acquired, including-
(i) the number being acquired; and
(ii) the percentage of all voting securities that that number represents; and
(iii) the percentage of all voting securities that will be held or controlled by the person acquiring the voting securities after completion of the acquisition; and
(iv) the aggregate of the percentages of all voting securities that will be held or controlled by the person acquiring the voting securities and by that person's associates after completion of the acquisition; and
(c) if the voting securities being acquired are voting securities of a body corporate other than the code company,-
(i) the number of voting securities in the code company that are held or controlled by that body corporate; and
(ii) the percentage of the total voting securities of the code company that that number represents; and
(d) the consideration for the acquisition or the manner in which the consideration will be determined and when the consideration is payable; and
(e) the reasons for the transaction; and
(f) a statement to the effect that the acquisition, if approved, will be permitted under rule 7(c) of the Takeovers Code as an exception to rule 6 of the Takeovers Code; and
(g) a statement by the person acquiring the voting securities setting out particulars of any agreement or arrangement (whether or not legally enforceable) that has been, or is intended to be, entered into between the person and any other person (other than between that person and the person disposing of the voting securities in respect of the matters referred to in paragraphs (a) to (e)) relating to the acquisition, holding, or control of the voting securities to be acquired, or to the exercise of voting rights in the code company; and
(h) the report from an independent adviser that complies with rule 18; and
(i) the statement by the directors of the code company referred to in rule 19.
Notice of meeting: allotment of voting securities
The notice of meeting containing the proposed resolution in respect of an allotment of voting securities referred to in rule 7(d) must contain, or be accompanied by,-
(a) the identity of the allottee; and
(b) particulars of the voting securities to be allotted, including-
(i) the number being allotted; and
(ii) the percentage of the aggregate of all existing voting securities and all voting securities being allotted that that number represents; and
(iii) the percentage of all voting securities that will be held or controlled by the person to whom the voting securities are being allotted after completion of the allotment; and
(iv) the aggregate of the percentages of all voting securities that will be held or controlled by the person to whom the voting securities are being allotted and by that person's associates after completion of the allotment; and
(c) if the voting securities being allotted are voting securities of a body corporate other than the code company-
(i) the number of voting securities in the code company that are held or controlled by that body corporate; and
(ii) the percentage of the total voting securities of the code company that that number represents; and
(d) the issue price for the voting securities to be allotted and when it is payable; and
(e) the reasons for the allotment; and
(f) a statement to the effect that the allotment, if approved, will be permitted under rule 7(d) of the Takeovers Code as an exception to rule 6 of the Takeovers Code; and
(g) a statement by the allottee setting out particulars of any agreement or arrangement (whether legally enforceable or not) that has been, or is intended to be, entered into between the allottee and any other person (other than between the allottee and the code company in respect of the matters referred to in paragraphs (a) to (e)) relating to the allotment, holding, or control of the voting securities to be allotted, or to the exercise of voting rights in the code company; and
(h) the report from an independent adviser that complies with rule 18; and
(i) the statement by the directors of the code company referred to in rule 19.
Voting restrictions
17. Voting restrictions
(1) The persons acquiring and disposing of the securities and their associates must not vote on a resolution for the approval of the acquisition referred to in rule 7(c).
(2) The allottee and its associates must not vote on a resolution for the approval of the allotment referred to in rule 7(d).
Independent adviser's report
18. Independent adviser's report
(1) The directors of the code company must obtain a report from an independent adviser on the merits of any proposed acquisition under rule 7(c) or allotment under rule 7(d) having regard to the interests of those persons who may vote to approve the acquisition or allotment.
(2) The report that is to be contained in, or to accompany, the notice of meeting referred to in rule 15 or rule 16 (as the case may be) may be either the full report given by the independent adviser or a summary report prepared by the adviser.
(3) If only a summary of the independent adviser's full report is contained in, or accompanies, the notice of meeting,-
(a) the full report must be available for inspection at the registered office of the code company on and after the date of the notice of meeting; and
(b) a copy of the full report must be provided to any person entitled to attend the meeting on request.
(4) The full report and any summary report of an independent adviser must include-
(a) a statement of the qualifications and expertise of the adviser; and
(b) a statement that the adviser has no conflict of interest that could affect the adviser's ability to provide an unbiased report; and
(c) if the report is a summary report, a statement that-
(i) the summary report is a fair summary and not misleading; and
(ii) the full report is available for inspection at the registered office of the code company on and after the date of the notice of meeting; and
(iii) a copy of the full report will be sent to any person entitled to attend the meeting on request.
Directors' statement
Directors' statement
(1) The directors of the code company must-
(a) provide a written statement as to whether they recommend approval or disapproval of any proposed acquisition under rule 7(c) or allotment under rule 7(d) and give their reasons; or
(b) provide a written statement that the directors of the code company are unable to make, or are not making, a recommendation and give their reasons.
(2) If any of the directors dissent from a recommendation or from any statement under subclause (1)(b) made by the directors or abstain from making a recommendation or any statement under subclause (1)(b), their names and their reasons for dissenting or abstaining must be stated.
Documents for Panel
19A Documents for Panel in respect of shareholder meetings
(1) A code company that sends a notice of meeting for the purposes of rule 15 or 16 must at the same time send to the Panel, in hard copy and (if possible) electronic form, a copy of that notice and any document accompanying it that relates to the meeting to be held for the purposes of rule 7(c) or 7(d).
(2) A person who publishes or sends to any holder of voting securities, in respect of a meeting held for the purposes of rule 7(c) or (d), a statement or information that is not required to be published or sent by the rules of this code must at the same time send to the Panel, in hard copy and (if possible) in electronic form, a copy of that statement or information.
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