THE CORPORATIONS LAW

CHAPTER 6 - TAKEOVERS

PART 6.5 - THE TAKEOVER PROCEDURE

Division 5 - General rules on takeover procedure

Subdivision C - Effect of proportional takeover approval provisions

SECTION 648G   INCLUDING PROPORTIONAL TAKEOVER PROVISIONS IN CONSTITUTION  

648G(1)  [Sunset clause]  

A company's proportional takeover approval provisions, unless sooner omitted from the constitution of the company, cease to apply at the end of:

(a)  unless paragraph (b) or (c) applies - 3 years;

(b)  if the constitution provides that the provisions apply for a specified period of less than 3 years and the provisions have not been renewed - the specified period; or

(c)  if the provisions have been renewed on at least one occasion and the resolution, or the most recent resolution, renewing the provisions states that the provisions are renewed for a specified period of less than 3 years - the specified period.

648G(2)  [Time period]  

The period referred to in subsection (1) starts:

(a)  if the provisions were contained in the company's constitution when it was incorporated or formed and have not been renewed - at that time; or

(b)  if the provisions were inserted in the company's constitution and have not been renewed - when the provisions were inserted; or

(c)  if the provisions have been renewed on at least one occasion - when the provisions were renewed, or last renewed.

648G(3)  [Deemed alteration of constitution]  

When the provisions cease to apply, the company's constitution is, by force of this subsection, altered by omitting the provisions.

648G(4)  [Ability to renew]  

A company may renew its proportional takeover approval provisions. The provisions are to be renewed in the same manner as that in which the company could alter its constitution to insert proportional takeover approval provisions.

648G(5)  [Content of notice]  

With every notice that:

(a)  specifies the intention to propose:

(i) a resolution to alter a company's constitution by inserting proportional takeover approval provisions; or

(ii) a resolution to renew a company's proportional takeover approval provisions; and

(b)  is sent to a person who is entitled to vote on the proposed resolution;

the company must send a statement that:

(c)  explains the effect of the proposed provisions, or of the provisions proposed to be renewed; and

(d)  explains the reasons for proposing the resolution and sets out the factual matters and principles underlying those reasons; and

(e)  states whether, as at the day on which the statement is prepared, any of the directors of the company is aware of a proposal by a person to acquire, or to increase the extent of, a substantial interest in the company and, if so, explains the extent (if any) to which the proposal has influenced the decision to propose the resolution; and

(f)  for a proposed resolution to renew proportional takeover approval provisions - reviews both the advantages, and disadvantages, of the provisions proposed to be renewed for:

(i) the directors; and

(ii) the company's members;

during the period during which the provisions have been in effect; and

(g)  discusses both the potential advantages, and the potential disadvantages, of the proposed provisions, or of the provisions proposed to be renewed, for:

(i) the directors; and

(ii) the company's members.

648G(6)  [Members of class may act]  

If, on a particular day, a company purports to:

(a)  alter its constitution by inserting proportional takeover approval provisions; or

(b)  renew its proportional takeover approval provisions;

then:

(c)  holders who together hold not less than 10% (by number) of the issued securities in a class of securities in the company to which the provisions apply may, within 21 days after that day, apply to the Court to have the purported alteration or renewal set aside to the extent to which it relates to that class; and

(d)  unless and until an application made under paragraph (c) is finally determined by the making of an order setting aside the purported alteration or renewal to that extent, the company is taken for all purposes (other than the purposes of an application of that kind):

(i) to have validly altered its constitution by inserting the provisions referred to in paragraph (a) applying to that class; or

(ii) to have validly renewed the provisions referred to in paragraph (b) applying to that class.

648G(7)  [Appointment of representative]  

An application under paragraph (6)(c) may be made, on behalf of the holders entitled to make the application, by a holder or holders appointed by them in writing.

648G(8)  [Power of Court]  

On an application under paragraph (6)(c), the Court may make an order setting aside the purported alteration or renewal to the extent to which it applies to that class if it is satisfied that it is appropriate in all the circumstances to do so. Otherwise the Court must dismiss the application.

648G(9)  [Lodgment of order]  

Within 14 days after the day on which the Court makes an order of the kind referred to in subsection (8) in relation to a company, the company must lodge a copy of the order with ASIC.