THE CORPORATIONS LAW

CHAPTER 6 - TAKEOVERS

PART 6.4 - FORMULATING THE TAKEOVER OFFER

Division 2 - Consideration for the offer

SECTION 622   ESCALATION AGREEMENTS  

622(1)  Benefits linked to bids and proposed bids not allowed.  

A person who makes or proposes to make a takeover bid for securities, or their associate, contravenes this section if:

(a)  a person acquires a relevant interest in securities in the bid class within the 6 months before the bid is made or proposed; and

(b)  at any time whatever, the bidder, proposed bidder or associate gives or agrees to give a benefit to, or receives or agrees to receive a benefit from:

(i) a person who had a relevant interest in any of the paragraph (a) securities immediately before the acquisition; or

(ii) an associate of a person who had a relevant interest in any of those securities at that time; and

(c)  the benefit is attributable to the acquisition or matters that include the acquisition; and

(d)  the amount or value of the benefit is, or is to be, determined by reference to or to matters that include either of the following:

(i) the amount or value of the consideration for the securities under the bid or proposed bid

(ii) the amount or value of the consideration for which the bidder or proposed bidder acquires, offers or proposes to offer to acquire, securities in the bid class during the offer period (whether or not under the bid) or under Chapter 6A.

622(2)  Contravening agreements void.  

An agreement is void to the extent that it purports to provide for:

(a)  a person to give a benefit to a person; or

(b)  a person to receive a benefit from a person;

in contravention of subsection (1).