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 .

SECTION 602  

602   PURPOSES OF CHAPTER  
The purposes of this Chapter are to ensure that:

(a)    the acquisition of control over:

(i) the voting shares in a listed company, or an unlisted company with more than 50 members; or

(ii) the voting shares in a listed body (other than a notified foreign passport fund); or

(iii) the voting interests in a listed registered scheme;

takes place in an efficient, competitive and informed market; and

(b)    the holders of the shares or interests, and the directors of the company or body or the responsible entity for the scheme:

(i) know the identity of any person who proposes to acquire a substantial interest in the company, body or scheme; and

(ii) have a reasonable time to consider the proposal; and

(iii) are given enough information to enable them to assess the merits of the proposal; and

(c)    as far as practicable, the holders of the relevant class of voting shares or interests all have a reasonable and equal opportunity to participate in any benefits accruing to the holders through any proposal under which a person would acquire a substantial interest in the company, body or scheme; and

(d)    an appropriate procedure is followed as a preliminary to compulsory acquisition of voting shares or interests or any other kind of securities under Part 6A.1 .

Note 1: To achieve the objectives referred to in paragraphs (a), (b) and (c), the prohibition in section 606 and the exceptions to it refer to interests in " voting shares " . To achieve the objective in paragraph (d), the provisions that deal with the takeover procedure refer more broadly to interests in " securities " .

Note 2: Subsection 92(3) defines securities for the purposes of this Chapter.

SECTION 602A   MEANING OF SUBSTANTIAL INTEREST  

602A(1)    
A reference in this Chapter to a substantial interest in a company, listed body (other than a notified foreign passport fund) or listed registered scheme is not to be read as being limited to an interest that is constituted by one or more of the following:

(a)    a relevant interest in securities in the company, body or scheme;

(b)    a legal or equitable interest in securities in the company, body or scheme;

(c)    a power or right in relation to:

(i) the company, body or scheme; or

(ii) securities in the company, body or scheme.

602A(2)    
A person does not have a substantial interest in the company, body or scheme for the purposes of this Chapter merely because the person has an interest in, or a relationship with, the company, body or scheme of a kind prescribed by the regulations for the purposes of this subsection.

602A(3)    

The regulations may provide that an interest of a particular kind is an interest that may constitute a substantial interest in a company, listed body (other than a notified foreign passport fund) or listed registered scheme for the purposes of this Chapter.

SECTION 603  

603   CHAPTER EXTENDS TO SOME LISTED BODIES THAT ARE NOT COMPANIES  
This Chapter applies to the acquisition of relevant interests in the securities of listed bodies that are not companies but are incorporated or formed in Australia in the same way as it applies to the acquisition of relevant interests in the securities of companies.

Note: Section 9 defines company and listed .

SECTION 604   CHAPTER EXTENDS TO LISTED REGISTERED SCHEMES  

604(1)    
This Chapter applies to the acquisition of relevant interests in the interests in a registered scheme that is also listed as if:

(a)    the scheme were a listed company; and

(b)    interests in the scheme were shares in the company; and

(c)    voting interests inthe scheme were voting shares in the company; and

(d)    a meeting of the members of the scheme were a general meeting of the company; and

(e)    the obligations and powers that are imposed or conferred on the company were imposed or conferred on the responsible entity; and

(f)    the directors of the responsible entity were the directors of the company; and

(g)    the appointment of a responsible entity for the scheme were the election of a director of the company; and

(h)    the scheme ' s constitution were the company ' s constitution.

Note 1: Paragraph (g): See subsection 610(2) .

Note 2: Section 9 defines voting interest in a managed investment scheme.

604(2)    

The regulations may modify the operation of this Chapter as it applies in relation to the acquisition of interests in listed registered schemes.

SECTION 605   CLASSES OF SECURITIES  

605(1)    
Takeover bids are made for securities within a particular class. Similarly, compulsory acquisition and buy-out rights operate on securities within a particular class.

605(2)    
For the purposes of this Chapter and Chapters 6A and 6C , securities are not taken to be different classes merely because:

(a)    some of the securities are fully-paid and others are partly-paid; or

(b)    different amounts are paid up or remain unpaid on the securities.

SECTION 605A  

605A   CHAPTER DOES NOT APPLY TO MCIs  

This Chapter does not apply to MCIs.

PART 6.7 - WITHDRAWAL AND SUSPENSION OF OFFERS  

SECTION 652A  

652A   WITHDRAWAL OF UNACCEPTED OFFERS UNDER TAKEOVER BID  
Unaccepted offers under a takeover bid may only be withdrawn under section 652B or 652C .

SECTION 652B  

652B   WITHDRAWAL OF TAKEOVER OFFERS WITH ASIC CONSENT  
Unaccepted offers under a takeover bid may be withdrawn with the written consent of ASIC. ASIC may consent subject to conditions.

SECTION 652C   WITHDRAWAL OF MARKET BIDS  
Bidder entitled to withdraw if certain events happen during the offer period

652C(1)    
The bidder may withdraw unaccepted offers made under a market bid if 1 of the following happens during the bid period, but only if the bidder ' s voting power in the target is at or below 50% when the event happens:

(a)    the target converts all or any of its shares into a larger or smaller number of shares (see section 254H );

(b)    the target or a subsidiary resolves to reduce its share capital in any way;

(c)    the target or a subsidiary:

(i) enters into a buy-back agreement; or

(ii) resolves to approve the terms of a buy-back agreement under subsection 257C(1) or 257D(1) ;

(d)    the target or a subsidiary issues shares, or grants an option over its shares, or agrees to make such an issue or grant such an option;

(e)    the target or a subsidiary issues, or agrees to issue, convertible notes;

(f)    the target or a subsidiary disposes, or agrees to dispose, of the whole, or a substantial part, of its business or property;

(g)    

the target or a subsidiary grants, or agrees to grant, a security interest in the whole, or a substantial part, of its business or property;

(h)    the target or a subsidiary resolves to be wound up.

652C(2)    

The bidder may also withdraw unaccepted offers made under a market bid if 1 of the following happens during the bid period:

(a)    a liquidator or provisional liquidator of the target or of a subsidiary is appointed;

(b)    a court makes an order for the winding up of the target or of a subsidiary;

(c)    an administrator of the target, or of a subsidiary, is appointed under section 436A , 436B or 436C ;

(d)    the target or a subsidiary executes a deed of company arrangement;

(da)    

a restructuring practitioner for the target, or for a subsidiary, is appointed under section 453B ;

(db)    

the target or a subsidiary makes a restructuring plan under Division 3 of Part 5.3B ;

(e)    a receiver, or a receiver and manager, is appointed in relation to the whole, or a substantial part, of the property of the target or of a subsidiary.

This is so regardless of the bidder ' s voting power at the time.

652C(3)    
Notice of the withdrawal must be given to each relevant market operator.

652C(4)    

An offence based on subsection (3) is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code .