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 6.9 - OTHER ACTIVITIES DURING THE BID PERIOD  

SECTION 654A   BIDDER NOT TO DISPOSE OF SECURITIES DURING THE BID PERIOD  

654A(1)    
The bidder must not dispose of any securities in the bid class during the bid period.

654A(1A)    

An offence based on subsection (1) is an offence of strict liability.

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

654A(2)    
Subsection (1) does not apply to a disposal of securities by the bidder if:

(a)    someone else who is not an associate of the bidder makes an offer, or improves the consideration offered, under a takeover bid for securities in the bid class after the bidder's statement is given to the target; and

(b)    the bidder disposes of the securities after the offer is made or the consideration is improved.

Note: A defendant bears an evidential burden in relation to the matters in subsection (2) , see subsection 13.3(3) of the Criminal Code .

SECTION 654B  

654B   DISCLOSURES ABOUT SUBSTANTIAL SHAREHOLDINGS IN LISTED COMPANIES  
During the bid period, substantial shareholding notices that need to be lodged under section 671B must be lodged by 9.30 am the next business day (rather than the usual 2 business days).

SECTION 654C   DISCLOSURES ABOUT SUBSTANTIAL SHAREHOLDINGS IN UNLISTED COMPANIES  

654C(1)    
A bidder making a bid for securities of an unlisted company must give the target a notice stating the bidder ' s voting power in the target if, at a particular time during the bid period, the bidder ' s voting power in the target rises from below a percentage in the following list to that percentage or higher:

(a)    25%;

(b)    50%;

(c)    75%;

(d)    90%.

654C(2)    
The notice must be given as soon as practicable, and in any event within 2 business days, after the rise in voting power occurred.

654C(3)    
The target must:

(a)    make the notice available at its registered office for inspection without charge by any holder of bid class securities during the bid period; and

(b)    lodge the notice with ASIC.

654C(4)    

An offence based on subsection (1) or (3) is an offence of strict liability.

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