Takeovers Panel

	TAKEOVERS CODE (CLASS EXEMPTIONS) NOTICE (NO 2) 2001

2001/170

Takeovers Code (Class Exemptions)
Notice (No 2) 2001

Pursuant to section 45 of the Takeovers Act 1993, the Takeovers Panel gives the following notice (to which is appended a statement of reasons of the Takeovers Panel).

Contents

1.   Title
2.   Commencement
3.   Interpretation

Part 1 - Exemptions for certain acquisitions of voting securities
Part 2 - Exemptions for certain allotments of voting securities
Part 3 - Miscellaneous exemptions

Statement of Reasons

Notice

Title
This notice is the Takeovers Code (Class Exemptions) Notice (No 2) 2001.
Commencement
This notice comes into force on 1 July 2001.
Interpretation

(1)

In this notice, unless the context otherwise requires,—

Act means the Takeovers Act 1993

additional voting rights, in relation to any person who has increased voting control, means the portion of the voting rights in a code company held or controlled by the person that corresponds to the person’s increase in voting control

aggregate associate increase, in respect of any person whose control percentage has decreased in the manner referred to in clause 6(1) or clause 9(1) or clause 10(1) (the relevant decrease) and whose voting control is subsequently increased (the relevant increase), means,—

(a) if the aggregate of the control percentages of the person and the person’s associates after the relevant decrease was less than 20%, the increase (if any) in the aggregate of the control percentages of the person’s associates after the relevant decrease and before the relevant increase; and

(b) if the aggregate of the control percentages of the person and the person’s associates after the relevant decrease was equal to or greater than 20%, zero

allotment includes the issue of voting securities by a code company and the sale, transfer, or other disposal of treasury stock by a code company

beneficiary,—

(a) in relation to a nominee company, means a person for whom the nominee company acts in the ordinary course of business as a nominee company; and

(b) in relation to a bare trustee of a trust, means a beneficiary of the trust; and

(c) in relation to a sharebroker, means a person for whom the sharebroker acts in the ordinary course of business as a sharebroker

Code means the Takeovers Code approved by the Takeovers Code Approval Order 2000 (SR 2000/210)

control percentage means the percentage of voting rights in a code company that a person holds or controls

corporate representative means a person who is appointed by a body corporate that holds voting securities in a code company to attend, on behalf of the body corporate, 1 or more meetings of holders of voting securities in the code company

group means a body corporate and its wholly-owned subsidiaries

group parent means a body corporate that is a member of a group and is not a wholly-owned subsidiary of another body corporate

lender means a person whose ordinary business includes the lending of money or the provision of financial services (including the holding of security interests on behalf of lenders)

non-associate, in relation to a person, means any other person who is not an associate of the person

receiver has the same meaning as in section 2(1) of the Receiverships Act 1993

security interest has the same meaning as in section 17(1)(a) of the Personal Property Securities Act 1999

sharebroker means a person permitted under the Sharebrokers Act 1908 to act as a sharebroker

treasury stock means voting securities or securities that, but for the suspension of voting rights attached to them, would be voting securities issued by a code company and held by the code company

underwriter means a person whose ordinary business includes entering into bona fide underwriting or subunderwriting contracts with respect to offers of securities

upstream party, in relation to a person, means any other person who directly or indirectly has effective control over the person.

(2)

In this notice, a reference to a person increasing voting control is a reference to the person becoming the holder or controller of an increased percentage of the voting rights in a code company.

(3)

Any term or expression that is defined in the Act or the Code and used, but not defined, in this notice has the same meaning as in the Act or the Code.

Part 1
Exemptions for certain acquisitions of voting securities

Exemption for buyback approved by shareholders

(1)

Every person who increases voting control as a result of the acquisition by a code company of its own voting securities is exempted from rule 6(1) of the Code in respect of that increase in voting control.

(2)

The exemption is subject to the condition that—

(a)

the acquisition is approved by an ordinary resolution of the shareholders of the code company; and

(b)

neither the person nor any person who is or was at the time an associate of the person voted in favour of the resolution; and

(c)

the notice of meeting containing the proposed resolution contained, or was accompanied by,—

(i)

the identity of the person; and

(ii)

particulars of the voting securities that may be acquired by the code company, including—

(A)	the maximum number of voting securities that may be acquired; and
(B)	the percentage of all voting securities of the code company that the maximum number of voting securities represents; and
(C)	the potential maximum aggregate of the percentages of all voting securities in the code company that the person and the person’s associates would hold or control if the maximum number of voting securities were acquired; and

(iii)

the consideration for the acquisition or the manner in which the consideration would be determined and when the consideration would be payable; and

(iv)

the reasons for the acquisition; and

(v)

a statement to the effect that the increase in the person’s voting control that would result only from the acquisition by the code company of its own voting securities, if approved, would be permitted as an exception to rule 6 of the Code; and

(vi)

a report (or summary of a report) from an independent adviser in relation to the acquisition that complies with rule 18 of the Code (as if the references in that rule to acquisition under rule 7(c) of the Code and notice of meeting referred to in rule 15 of the Code were references to the acquisition and the notice, respectively); and

(vii)

a statement by the directors of the code company in relation to the acquisition that complies with rule 19 of the Code (as if the reference in that rule to acquisition under rule 7(c) of the Code was a reference to the acquisition); and

(d)

rules 18 and 19 of the Code are complied with in relation to the proposed acquisition (as if the references in those rules to acquisition under rule 7(c) of the Code and notice of meeting referred to in rule 15 of the Code were references to the acquisition and the notice, respectively).

Exemption for buyback that is not approved by shareholders: increased voting control eliminated within 6 months after increase

(1)

(2)

The exemption is subject to the condition that—

(a)

the person’s increase in voting control is not exempted from rule 6(1) of the Code by clause 4; and

(b)

the control percentage of the person is decreased within 6 months after the increase in the person’s voting control to, or below, either—

(i)

the control percentage of the person immediately before the increase in the person’s voting control; or

(ii)

if—

(A)	the person’s control percentage immediately before the increase in the person’s voting control was more than 50%, the maximum control percentage to which the person would have been entitled under rule 7(e) of the Code at the time of the decrease had the increase not occurred; or
(B)	the aggregate of the control percentages of the person and the person’s associates immediately before that increase was less than 20%, 20% less the aggregate of the control percentages of the person’s associates at the time of the decrease; and

(c)

the additional voting rights of the person are not exercised before that decrease.

Exemption for increased voting control within 6 months after buyback reduced control percentage

(1)

Every person whose control percentage is, or has been, decreased as a result of the acquisition by a code company of its own voting securities is exempted from compliance with rule 6(1) of the Code in respect of any increase in the person’s voting control after that decrease.

(2)

The exemption is subject to the condition that—

(a)

the increase in the person’s voting control occurs within 6 months after the decrease of the person’s control percentage; and

(b)

the increase in the person’s voting control does not result in the person’s control percentage exceeding the lesser of—

(i)	the percentage that exceeds by 5 the control percentage of the person immediately before the increase in the person’s voting control, less any aggregate associate increase; or
(ii)	the control percentage of the person immediately before its decrease, less any aggregate associate increase.

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