Corporations Act 2001

CHAPTER 6 - TAKEOVERS  

Note: This Chapter only applies to acquisitions of interests in a CCIV if the CCIV is a listed company: see Division 1 of Part 8B.7 .

PART 6.2 - EXCEPTIONS TO THE PROHIBITION  

SECTION 611  

611   EXCEPTIONS TO THE PROHIBITION  

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.

Acquisitions that are exempt	[ operative ]
	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.
	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 unconditional or subject only to one or both of the following:
		(i)	a condition that relates to the occurrence or non-occurrence of an event referred to in subsection 652C(1) or (2) ;
		(ii)	a condition that is required under subsection 625(3) .
	See also sections 612 and 613 .
	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 unconditional or subject only to one or both of the following:
		(i)	a condition that relates to the occurrence or non-occurrence of an event referred to in subsection 652C(1) or (2) ;
		(ii)	a condition that is required under subsection 625(3) .
	See sections 612 and 613.
	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.
	[ CCH Note: There is no Item 5 in the section 611 table. ]
	Nature of acquirer
6	An acquisition that results from the exercise by a person of a power, or the appointment of a receiver, or receiver and manager, under an instrument or agreement creating or giving rise to a security interest if:
	(a)	both of the following apply:
		(i)	the person ' s ordinary business includes the provision of financial accommodation by any means;
		(ii)	the person took or acquired the security interest in the ordinary course of their business of the provision of financial accommodation by any means and on ordinary commercial terms; or
	(b)	all of the following apply:
		(i)	the person took or acquired the security interest for the benefit of another person;
		(ii)	the person ' s ordinary business, or the other person ' s ordinary business, includes the provision of financial accommodation by any means;
		(iii)	the person took or acquired the security interest in relation to financial accommodation provided by the other person in the ordinary course of their business of the provision of financial accommodation by any means and on ordinary commercial terms.
	In this item, a reference to a security interest includes a reference to a negative pledge.
	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.
	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.
	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.
	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 or a CSF offer document, of securities in the company in which the acquisition is made if:
	(a)	the issue is to a promoter; and
	(b)	the document disclosed the effect that the acquisition would have on the promoter ' s voting power in the company; and
	(c)	no other disclosure document or CSF offer document has previously been issued or published by or on behalf of the company.
	Underwriting of fundraising
13	An acquisition that results from an issue, under a disclosure document or a CSF offer 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 document disclosed the effect that the acquisition would have on the person ' s voting power in the company.
	Acquisition through listed company
14	An acquisition that results from another acquisition of relevant interests in voting shares in a body corporate included as a primary listing in the official list of:
	(a)	a declared financial market; or
	(b)	a foreign body conducting a financial market that is a body approved in writing by ASIC for the purposes of this item.
	Wills etc.
15	An acquisition through a will or through operation of law.
	Forfeiture of shares
16	An acquisition that results from an auction of forfeited shares conducted on-market.
	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
18	An acquisition that results from an arrangement entered into by a liquidator under section 507.
	Buy-back
19	An acquisition that results from a buy-back authorised by section 257A.
	Proprietary companies that have CSF shareholders
19A	An acquisition of a relevant interest in issued voting shares in a proprietary company if:
	(a)	the company has one or more CSF shareholders; and
	(b)	all the other requirements (if any) prescribed by the regulations for the purposes of this paragraph are met.
	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.