THE CORPORATIONS LAW

CHAPTER 6 - TAKEOVERS

PART 6.2 - EXCEPTIONS TO THE PROHIBITION

SECTION 611   EXCEPTIONS TO THE PROHIBITION  

611     The following table sets out:

(a)  acquisitions of relevant interests in a company's voting shares that are exempt from the prohibition in subsection 606(1); and

(b)  acquisitions of relevant interests in a company's voting shares resulting from acquisitions of legal or equitable interests in securities of a body corporate that are exempt from the prohibition in subsection 606(2).

Note:

Some of the items in the table cover only activities in relation to the company itself (items 7, 8, 12 and 13) while the other items cover acquisitions in that company that may occur through activities in relation to other companies.

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 Acquisitions that are exempt               [operative]
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   Takeover bids

   Acceptance of takeover offer

 1 An acquisition that results from the acceptance of
   an offer under a takeover bid.

   See also section 612.
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   On-market purchase during bid period

 2 An acquisition in relation to bid class securities
   that results from an on-market transaction if:

   (a) the acquisition is by or on behalf of the bidder
       under a takeover bid; and

   (b) the acquisition occurs during the bid period;
       and

   (c) the bid is for all the voting shares in the bid
       class; and

   (d) the bid is:

        (i) unconditional; or

       (ii) conditional only on the happening of an
            event referred to in subsection 652C(1)
            or (2).

   See also sections 612 and 613.
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   On-market purchase of convertible securities
   during bid period

 3 An acquisition of bid class securities that results
   directly from the exercise of rights attached to
   convertible securities if:
  
  (a) The acquisition is by or on behalf of the bidder
      under a takeover bid; and
  (b) the bidder acquired a relevant interest in the
      convertible securities through an on-market
      transaction during the bid period; and

  (c) the bid is for all the voting shares in the bid
      class; and

  (d) the bid is:

       (i) unconditional; or

      (ii) conditional only on the happening of an
           event referred to in subsection 652C(1)
           or (2).

   See sections 612 and 613.
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   Acceptance of scrip offered as takeover
   consideration

 4 An acquisition that results from the acceptance of:

   (a) an offer under a takeover bid if the voting
       shares are included in the consideration for
       offers under the bid; or

   (b) an offer that results in an acquisition to which
       item 5 applies.
 
   See also section 612.
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   Nature of acquirer

 6 An acquisition that results from the exercise by a
   person of a power, or appointment as a receiver, or
   receiver and manager, under a mortgage, charge or
   other security if:

   (a) the person's ordinary business includes
       providing financial services; and

   (b) the person took or acquired the security in the
       ordinary course of their business of providing
       financial services and on ordinary commercial
       terms.

Approval by resolution of target

 7 An acquisition approved previously by a
   resolution passed at a general meeting of the
   company in which the acquisition is made, if:

   (a) no votes are cast in favour of the resolution
       by:

        (i) the person proposing to make the
            acquisition and their associates; or

       (ii) the persons (if any) from whom the
            acquisition is to be made and their
            associates; and

   (b) the members of the company were given all
       information known to the person proposing to
       make the acquisition or their associates, or
       known to the company, that was material to
       the decision on how to vote on the resolution,
       including:

         (i) the identity of the person proposing to
             make the acquisition and their
             associates; and

        (ii) the maximum extent of the increase in
             that person's voting power in the
             company that would result from the
             acquisition; and

       (iii) the voting power that person would
             have as a result of the acquisition; and

        (iv) the maximum extent of the increase in
             the voting power of each of that
             person's associates that would result
             from the acquisition; and

         (v) the voting power that each of that
             person's associates would have as a
             result of the acquisition.
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   Target newly formed

 8 An acquisition that results from an issue of
   securities of the company in which the acquisition
   is made if the company has not started to carry on
   any business and has not borrowed any money.

   Manner of acquisition

   3% creep in 6 months
 
9 An acquisition by a person if:

   (a) throughout the 6 months before the acquisition
       that person, or any other person, has had
       voting power in the company of at least 19%;
       and

   (b) as a result of the acquisition, none of the
       persons referred to in paragraph (a) would
       have voting power in the company more than
       3 percentage points higher than they had 6
       months before the acquisition.
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   Rights issues

10 An acquisition that results from an issue of
   securities that satisfies all of the following
   conditions:

   (a) a company offers to issue securities in a
       particular class

   (b) offers are made to every person who holds
       securities in that class to issue them with the
       percentage of the securities to be issued that
       is the same as the percentage of the securities
       in that class that they hold before the issue

   (c) all of those persons have a reasonable
       opportunity to accept the offers made to them

   (d) agreements to issue are not entered into until a
       specified time for acceptances of offers has
       closed

   (e) the terms of all the offers are the same.

   This extends to an acquisition by a person as
   underwriter to the issue or sub-underwriter.

   See section 615.
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   Dividend reinvestment etc.

11 An acquisition that results from an issue of:

   (a) shares in a company to existing holders of
       shares in the company under a dividend
       reinvestment plan or bonus share plan; or

   (b) interests in a managed investment scheme to
       existing holders of interests in the scheme
       under a distribution reinvestment plan or
       switching facility;

   if the plan or facility is available to all members.

   Disregard any unavailability to foreign holders in
   determining whether the plan or facility is
   available to all members.

   Initial public offering (IPO) fundraising

12 An acquisition that results from an issue under a
   disclosure document of securities in the company
   in which the acquisition is made if:

   (a) the issue is to a promoter; and

   (b) the disclosure document is the first issued by
       the company; and

   (c) the disclosure document disclosed the effect
       that the acquisition would have on the
       promoter's voting power in the company.
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   Underwriting of fundraising

13 An acquisition that results from an issue under a
   disclosure document of securities in the company
   in which the acquisition is made if:

   (a) the issue is to a person as underwriter to the
       issue or sub-underwriter; and

   (b) the disclosure document disclosed the effect
       that the acquisition would have on the
       person's voting power in the company.
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       Acquisition through listed company

14 An acquisition that results from another
   acquisition of relevant interests in voting shares in
   a body corporate included in the official list of:

   (a) a stock exchange; or

   (b) a foreign body conducting a stock market that
       is a body approved in writing by ASIC for the
       purposes of this item.
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   Wills etc.

15 An acquisition through a will or through operation
   of law.
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   Forfeiture of shares

16 An acquisition that results from an auction of
   forfeited shares conducted on-market.
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   Compromise, arrangement, liquidation or buy-back

   Part 5.1 compromise or arrangement

17 An acquisition that results from a compromise or
   arrangement approved by the Court under Part 5.1.

   Section 507 arrangement
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18 An acquisition that results from an arrangement
   entered into by a liquidator under section 507.
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   Buy-back

19 An acquisition that results from a buy-back
   authorised by section 257A.
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   Regulations

20 An acquisition made in a manner or in
   circumstances prescribed by the regulations. The
   circumstances may include acquisitions of relevant
   interests in voting shares in a specified body or
   class of bodies.
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