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 5
Dealings and defensive tactics
Certain dispositions and acquisitions
Dispositions
During the offer period, neither the offeror nor any person acting jointly or in concert with the offeror may dispose of any equity securities in the target company other than to an offeror under another offer that is made under this code.
Acquisitions
(1) During the offer period, the offeror, any related company of the offeror, any person acting jointly or in concert with the offeror, or any of the directors of any of them, must not acquire any equity securities in the target company otherwise than under the offer unless-
(a) the offeror has made a full offer for cash, or a full offer with a cash alternative; and
(b) the acquisition is made no later than 14 days before the end of the offer period; and
(c) the acquisition is made only for cash; and
(d) the acquisition of any equity securities will not result in the offeror and the offeror's associates holding or controlling in total more than 20% of the voting rights in the target company (excluding any equity securities in respect of which the offeror has received acceptances of the offeror's offer), unless the offer has become unconditional; and
(e) notice is given under subclause (2) by the offeror.
(2) Notice of the acquisition of securities under subclause (1) must-
(a) be given no later than the day after the date of acquisition-
(i) if any of the offeror, any holding company of the offeror, or the target company is a listed company or entity, to the target company, the registered exchange, and the Panel; or
(ii) if none of the offeror, any holding company of the offeror, or the target company is a listed company or entity, to the target company and the Panel; and
(b) state, in respect of the date of acquisition of the securities,-
(i) the aggregate number of securities, per class, acquired; and
(ii) the weighted average price, per class, paid.
Position if consideration exceeds consideration specified in offer
If the consideration paid in any acquisition under rule 36 exceeds the cash consideration or cash alternative consideration specified in the offer,-
(a) the offer is deemed to be varied under rule 27 as from the date of the acquisition so that the cash consideration or cash alternative consideration under the offer is equal to the consideration paid for the acquisition; and
(b) the provisions of this code relating to variation of an offer apply (with any necessary modifications).
Defensive tactics
38. Defensive tactics restricted
(1) If a code company has received a takeover notice or has reason to believe that a bona fide offer is imminent, the directors of the company must not take or permit any action, in relation to the affairs of the code company, that could effectively result in-
(a) an offer being frustrated; or
(b) the holders of equity securities of the code company being denied an opportunity to decide on the merits of an offer.
(2) Subclause (1) does not prevent the directors of a code company taking steps to encourage competing bona fide offers from other persons.
(3) Subclause (1) is subject to rule 39.
39. When action permitted
The directors of a code company may take or permit the kind of action referred to in rule 38(1) if-
(a) the action has been approved by an ordinary resolution of the code company; or
(b) the action is taken or permitted under a contractual obligation entered into by the code company, or in the implementation of proposals approved by the directors of the code company, and the obligations were entered into, or the proposals were approved, before the code company received the takeover notice or became aware that the offer was imminent; or
(c) if paragraphs (a) and (b) do not apply, the action is taken or permitted for reasons unrelated to the offer with the prior approval of the Panel.
Notice of meeting
The notice of meeting containing the proposed resolution for the approval of the action referred to in rule 39(a) must contain, or be accompanied by,-
(a) full particulars of the proposed action; and
(b) the reasons for it; and
(c) a statement explaining the significance of the resolution under this code.
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