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 7
Compulsory acquisitions
Interpretation
In this Part, unless the context otherwise requires,-
acquisition notice means the notice referred to in rule 54
compulsory sale, in relation to a code company, means that the outstanding security holders must sell their equity securities in the code company to the dominant owner
dominant owner, in relation to a code company, means a person who, after this code comes into force, becomes the holder or controller, or 2 or more persons acting jointly or in concert who, after this code comes into force, become the holders or controllers, of 90% or more of the voting rights in the code company (whether by reason of acceptances of an offer or otherwise)
outstanding securities, in relation to a code company, means all the equity securities in the code company that the dominant owner does not already hold or control
outstanding security holders, in relation to a code company, means the holders of the outstanding securities
voluntary sale, in relation to a code company, means that the outstanding security holders have the right to sell their equity securities in the code company to the dominant owner.
Rights and obligations
Notification of dominant ownership
If a person becomes a dominant owner in a code company, that person must immediately send a written notice of that fact to the code company, the Panel, and the registered exchange (if any voting securities of the code company are quoted on the registered exchange's market).
Dominant owner's right
The dominant owner has the right to acquire all the outstanding securities in the code company in accordance with this Part.
Outstanding security holder's right
The outstanding security holders have the right to sell their outstanding securities in the code company to the dominant owner in accordance with this Part.
Acquisition notice
Acquisition notice
(1) The dominant owner must send to the outstanding security holders a notice in writing (the acquisition notice) that complies with rule 55.
(2) If the dominant owner becomes the dominant owner by reason of acceptances of an offer (whether or not the dominant owner has also acquired equity securities under rule 36), the acquisition notice must be sent not later than 30 days after the end of the offer period.
(3) If subclause (2) does not apply, the acquisition notice must be sent not later than 30 days after the dominant owner becomes the dominant owner.
(4) A copy of the acquisition notice must be-
(a) sent immediately to the code company, the Panel, and (if the code company is a listed company) the registered exchange; and
(b) delivered immediately to the Registrar of Companies for registration.
55. Contents of acquisition notice
(1) An acquisition notice must-
(a) state that the dominant owner holds or controls 90% or more of the voting rights in the code company; and
(b) state either-
(i) that the outstanding security holders must sell their equity securities in the code company to the dominant owner; or
(ii) that the outstanding security holders have the right to sell their equity securities in the code company to the dominant owner; and
(c) unless rule 56A applies, specify the consideration to be provided for the outstanding securities;
(ca) if rule 56A applies, state-
(i) the alternative consideration options; and
(ii) the procedure for nominating an alternative consideration option; and
(iii) what happens if an outstanding security holder does not nominate an alternative consideration option; and
(d) set out the outstanding security holders' rights under this Part; and
(e) specify the date on which the acquisition notice is sent to the outstanding security holders; and
(f) subject to subclause (2), be accompanied by an instrument of transfer for the outstanding securities held by the outstanding security holder to whom the acquisition notice is sent; and
(g) specify the return address for the instrument referred to in paragraph (f).
(2) If rule 56A applies, the instrument of transfer must provide for the outstanding security holder to nominate an alternative consideration option.
Determination of consideration
Dominant owner through acceptances of offer
(1) If a person becomes the dominant owner by reason of acceptances of an offer (whether or not the dominant owner has also acquired equity securities under rule 36), the consideration payable in respect of equity securities in any class must be the same as the consideration provided under the offer for equity securities in the same class.
(2) Subclause (1) applies only if acceptances of the offer were received in respect of more than 50% of the equity securities that were the subject of the offer in the class in respect of which the consideration is to be determined.
(3) In subclause (2), equity securities controlled by the dominant owner or held or controlled by associates of the dominant owner are not included for the purposes of calculating the following:
(a) the acceptances of the offer:
(b) the equity securities that were the subject of the offer.
56A Alternative consideration options
(1) This rule applies if rule 56 applies and the offer provided for alternative consideration options.
(2) If the offer provided for alternative consideration options, an outstanding security holder may nominate 1 of those options as the consideration payable and the dominant owner must provide that consideration.
(3) If the offer provided for alternative consideration options with a default consideration, and an outstanding security holder does not nominate 1 of the options, the dominant owner must provide the default consideration.
(4) If the offer provided for alternative consideration options without a default consideration, and an outstanding security holder does not nominate 1 of the options, the dominant owner must provide the consideration containing the greatest cash component.
(5) In this rule, default consideration means the consideration that was specified in the offer document to be payable if an accepting offeree did not nominate 1 of the alternative consideration options.
Determination of consideration in other cases
(1) If the consideration cannot be established under rule 56, the consideration specified in the acquisition notice-
(a) must be a cash sum certified as fair and reasonable by an independent adviser; or
(b) if a person becomes the dominant owner by reason of acceptances of an offer (whether or not the dominant owner has also acquired equity securities under rule 36) and the consideration under the offer was a cash sum or included a cash alternative, must be the same cash sum or cash alternative provided as consideration under the offer for equity securities of the same class.
(1A) The consideration specified under subclause (1) is the consideration payable for the outstanding securities.
(2) Subclause (1A) does not apply if, within 14 days after sending the acquisition notice, the dominant owner receives written objections to the specified consideration from outstanding security holders who hold the lesser of-
(a) 2% or more of a class of equity securities; or
(b) 10% or more of the outstanding securities of a class.
(3) If the dominant owner receives objections that together comply in all respects with subclause (2), the dominant owner must immediately refer to expert determination the amount of the consideration to be provided for the securities of the relevant class that must be a cash sum equal to the fair and reasonable value of those securities.
(4) For the purposes of this rule, the fair and reasonable value of an equity security must be calculated by-
(a) first assessing the value of all the equity securities in the class of equity securities of which the equity security forms part; and
(b) then allocating that value pro rata among all the securities of that class.
(5) On receipt of the independent adviser's certificate required under subclause (1)(a), the dominant owner must send a copy of it free of charge-
(a) immediately to the Panel and, if the target company is a listed company, to the registered exchange; and
(b) on request to any other person within 1 day of receipt of the request.
(6) On receipt of the expert determination required under subclause (3), the dominant owner must send a copy of it free of charge-
(a) immediately to the Panel and, if the target company is a listed company, to the registered exchange; and
(b) on request to any other person within 1 day of receipt of the request.
Expert determination
(1) A reference to expert determination under rule 57(3) is a reference to an independent person appointed by the Panel.
(2) The independent person acts as an expert and not as an arbitrator in making the determination.
(3) The dominant owner must pay the costs of the expert determination.
(4) The independent person must make the expert determination within 28 days after the date of his or her appointment to make the expert determination.
Payment of consideration and transfer of outstanding securities
Return of instrument of transfer
(1) An outstanding security holder who receives an acquisition notice accompanied by an instrument of transfer may, within 21 days after the date on which the acquisition notice is sent, return to the dominant owner, at the address specified in the acquisition notice, the duly executed instrument of transfer along with any other documents that are necessary to enable the dominant owner to be registered as the holder of the securities belonging to the outstanding security holder.
(2) Subclause (1) applies whether or not the outstanding security holder has objected to the specified consideration under rule 57(2).
Payment of consideration to outstanding security holder
(1) If an outstanding security holder returns to the dominant owner the documents referred to in rule 59, the dominant owner must, within 7 days after the dominant owner receives those documents, send to the outstanding security holder-
(a) the consideration specified in the acquisition notice; or
(b) if rule 56A applies, the consideration that is payable under that rule.
(2) Subclause (1) applies whether or not there has been a reference to expert determination under rule 57(3).
Delivery of consideration to code company
(1) If an outstanding security holder does not return to the dominant owner the documents referred to in rule 59, then, in the case of a compulsory sale, the dominant owner must, within 7 days after the expiration of the 21-day period referred to in rule 59,-
(a) deliver to the code company-
(i) the consideration specified in the acquisition notice; or
(ii) if rule 56A applies, the consideration that is payable under that rule; and
(b) send to the code company an instrument of transfer for those outstanding securities, executed on behalf of the outstanding security holder by the dominant owner or its agent.
(2) Any consideration received by the code company under subclause (1)(a) must be held in trust for the outstanding security holders until it is claimed.
(3) If the consideration is in cash, the cash must be deposited by the code company in an interest bearing trust account with a registered bank.
(4) Subclause (1) applies whether or not there has been a reference to expert determination under rule 57(3).
Position if consideration fixed by expert determination
(1) If the consideration fixed by expert determination under rule 57(3) exceeds the consideration specified in the acquisition notice, the dominant owner must immediately pay, in the same manner as the consideration specified in the acquisition notice is to be paid, the balance owing to-
(a) the outstanding security holders; or
(b) the code company.
(2) If the consideration fixed by expert determination is less than the consideration specified in the acquisition notice, the dominant owner may recover the excess paid from-
(a) the outstanding security holder; or
(b) the code company (if the consideration is held by the code company).
Registration of dominant owner as holder of outstanding securities
(1) In the case of a compulsory sale, the directors of the code company must register the dominant owner or its nominee as the holder of the outstanding securities on receipt by the code company of-
(a) the executed instruments of transfer and related documents received by the dominant owner in accordance with rule 59; and
(b) evidence to the reasonable satisfaction of the code company that the consideration has been sent to the outstanding security holders in accordance with rule 60; and
(c) the executed instrument or instruments of transfer and the consideration in accordance with rule 61.
(2) In the case of a voluntary sale, the directors of the code company must register the dominant owner or its nominee as the holder of the outstanding securities on receipt by the code company of-
(a) the executed instruments of transfer and related documents received by the dominant owner in accordance with rule 59; and
(b) evidence to the reasonable satisfaction of the code company that the consideration has been sent to the outstanding security holders in accordance with rule 60.
|
