Corporations Act 2001

CHAPTER 6A - COMPULSORY ACQUISITIONS AND BUY-OUTS  

SECTION 660A  

660A   CHAPTER EXTENDS TO SOME LISTED BODIES THAT ARE NOT COMPANIES  
This Chapter extends to the acquisition of 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 securities of companies.

Note 1: Section 9 defines company and listed .

Note 2: This Chapter only applies to the acquisition of securities in a CCIV if the CCIV is a listed company: see section 1240E .

SECTION 660B   CHAPTER EXTENDS TO LISTED REGISTERED SCHEMES  

660B(1)    
This Chapter extends to the acquisition of interests in a registered scheme that is also listed as if:

(a)    the scheme were a company; and

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

(c)    voting interests in the scheme were voting shares in the company.

660B(2)    
If Part 6A.1 applies to a scheme at the end of the bid period for a takeover, that Part continues to apply to the scheme in relation to the takeover bid even if the scheme ceases to be listed.

660B(3)    
If Part 6A.2 applies to a scheme when a compulsory acquisition notice under section 664C is lodged, that Part (including Division 2 of that Part) continues to apply to the scheme in relation to the notice even if the scheme ceases to be listed.

660B(4)    

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

SECTION 660C  

660C   CHAPTER DOES NOT APPLY TO MCIs  

This Chapter does not apply to MCIs.

PART 6A.1 - COMPULSORY ACQUISITIONS AND BUY-OUTS FOLLOWING TAKEOVER BID  

Division 1 - Compulsory acquisition of bid class securities  

SECTION 661A   COMPULSORY ACQUISITION POWER FOLLOWING TAKEOVER BID  
Threshold for compulsory acquisition power

661A(1)    
Under this subsection, the bidder under a takeover bid may compulsorily acquire any securities in the bid class if:

(a)    the bid is:

(i) an off-market bid to acquire all the securities in the bid class; or

(ii) a market bid; and

(b)    during, or at the end of, the offer period:

(i) the bidder and their associates have relevant interests in at least 90% (by number) of the securities in the bid class; and

(ii) the bidder and their associates have acquired at least 75% (by number) of the securities that the bidder offered to acquire under the bid (whether the acquisitions happened under the bid or otherwise).

This is so even if the bidder subsequently ceases to satisfy subparagraph (b)(i) because of the issue of further securities in the bid class.

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

661A(2)    
For the purposes of subsection (1) , disregard any relevant interests that the bidder has merely because of the operation of subsection 608(3) (relevant interest by 20% interest in body corporate).

Court may allow compulsory acquisition even if threshold not reached

661A(3)    
Under this subsection, the bidder under a takeover bid may compulsorily acquire securities in the bid class with the approval of the Court.

Securities to be acquired

661A(4)    
If the bidder compulsorily acquires securities in the bid class under subsection (1) or (3) , the bidder:

(a)    must acquire all the securities in the bid class:

(i) which were issued or granted before the end of the offer period; and

(ii) in which the bidder does not have a relevant interest; and

(b)    may elect to acquire all securities in the bid class:

(i) that were issued or granted after the end of the offer period and before the notice under section 661B is issued; and

(ii) in which the bidder does not have a relevant interest;

but only if the bidder and their associates have relevant interests in at least 90% (by number) of the securities in the bid class when the bidder gives notice under section 661B ; and

(c)    if securities exist when the bidder gives the notice under section 661B that:

(i) will convert, or may be converted, to securities in the bid class; or

(ii) confer rights to be issued securities in the bid class that may be exercised;

within the period of 6 weeks after the notice is given - may elect to acquire securities that come to be in the bid class during that period due to a conversion or exercise of the rights but only if the bidder and their associates have relevant interests in at least 90% of the securities (by number) in the bid class when the bidder gives notice under section 661B ; and

(d) may elect to acquire any securities in the bid class in which the bidder has a relevant interest (no matter when they were issued or granted).

661A(5)    
This section has effect despite anything in the constitution of the company whose securities are to be acquired.

SECTION 661B   COMPULSORY ACQUISITION NOTICE  
Compulsory acquisition notice

661B(1)    
To compulsorily acquire securities under subsection 661A(1) or (3) , the bidder must:

(a)    prepare a notice in the prescribed form that:

(i) informs the holders of the securities that the bidder is entitled to acquire their securities under that subsection; and

(ii) informs the holders about the compulsory acquisition procedure under this Part, including:

(A) their right under section 661D to obtain the names and addresses of everyone else the bidder has given the notice to; and

(B) their right under section 661E to apply to the Court for an order that the securities not be compulsorily acquired; and

(b)    lodge the notice with ASIC; and

(c)    give the notice to each other person who is:

(i) a holder of securities in the bid class; or

(ii) if the bidder elects under paragraph 661A(4)(c) to acquire securities that come to be in the bid class after the notice is given - a holder of the convertible securities referred to in that paragraph; and

(d)    

give a copy to each relevant market operator on the same day as it is lodged with ASIC if the target is listed.

If alternative forms of consideration were offered under the takeover bid, the notice must specify which of those forms of consideration will apply to the acquisition of the holder's securities if the holder does not elect one of the forms under paragraph 661C(2)(a) .

Note: Everyone who holds bid class securities on the day on which the notice is lodged with ASIC is entitled notice. Under section 661E , anyone who holds the securities after that day may apply to the Court to stop the acquisition.

Time for dispatching notices to holders

661B(2)    
The bidder must dispatch the notices under paragraph (1)(c) :

(a)    during the offer period, or within 1 month after:

(i) the end of offer period if the acquisition is under subsection 661A(1) ; or

(ii) the court approval if the acquisition is under subsection 661A(3) ; and

(b)    on the day the bidder lodges the notice with ASIC or on the next business day.

The notices cannot be withdrawn.

Strict liability offences

661B(2A)    

An offence based on subsection (1) or (2) is an offence of strict liability.

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

661B(3) - (4)    
(Repealed by No 69 of 2023, s 3, Sch 1[43] and [ 44] (effective 15 September 2023).)

SECTION 661C   TERMS ON WHICH SECURITIES TO BE ACQUIRED  
Same terms as takeover bid

661C(1)    
The bidder may acquire the securities only on the terms that applied to the acquisition of securities under the takeover bid immediately before:

(a)    the notice under section 661B is given if it is given before the end of the offer period; or

(b)    the end of the offer period if it is not.

Alternative forms of consideration under takeover bid

661C(2)    
If alternative forms of consideration were offered under the takeover bid, the form of consideration that applies to the acquisition of the holder's securities is:

(a)    the form that the holder elects; or

(b)    the form set out in the compulsory acquisition notice under subsection 661B(1) .

661C(3)    
The holder makes an election under subsection (2) by giving the bidder a notice of the election by the later of:

(a)    1 month after the compulsory acquisition notice is given under section 661B ; or

(b)    14 days after the holder is given a statement under section 661D if the holder asks for it.

661C(4)    

The election must:

(a)    comply with the conditions specified in regulations made for the purposes of this paragraph that provide for the manner of making the election; or

(b)    if no such regulations are made - be in writing.

SECTION 661D   HOLDER MAY OBTAIN NAMES AND ADDRESSES OF OTHER HOLDERS  

661D(1)    

Within 1 month after a compulsory acquisition notice in relation to securities in the bid class is lodged with ASIC under section 661B , the holder of the securities may ask the bidder in writing for a written statement of the names and addresses (but not the electronic addresses) of everyone else the bidder has given the notice to. The bidder must give the holder the statement within 7 days after the request.

661D(2)    

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

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

SECTION 661E   HOLDER MAY APPLY TO COURT TO STOP ACQUISITION  

661E(1)    
The holder of securities covered by a compulsory acquisition notice under section 661B may apply to the Court for an order that the securities not be compulsorily acquired under subsection 661A(1) . The application must be made before the later of:

(a)    the end of 1 month after the holder is given notice under section 661B ; or

(b)    the end of 14 days after the holder is given a statement under section 661D if the holder asks for it.

661E(2)    
The Court may order that the securities not be compulsorily acquired under subsection 661A(1) only if the Court is satisfied that the consideration is not fair value for the securities.

Note: See section 667C on valuation.

661E(3)    
If the Court makes an order under this section in relation to an acquisition of securities, the order applies to all holders who have applications to the Court pending for an order under this section in relation to the acquisition.

SECTION 661F  

661F   SIGNPOST - COMPLETING THE ACQUISITION OF THE SECURITIES  
See section 666A to find out how to complete the acquisition.

Division 2 - Compulsory buy-out of bid class securities  

SECTION 662A   BIDDER MUST OFFER TO BUY OUT REMAINING HOLDERS OF BID CLASS SECURITIES  

662A(1)    
If the bidder and their associates have relevant interests in at least 90% of the securities (by number) in the bid class at the end of the offer period, the bidder must offer to buy out the remaining holders of bid class securities in accordance with sections 662B and 662C .

662A(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 .

662A(2)    
This section does not apply to securities that are issued:

(a)    if the takeover bid was not subject to a defeating condition - after the end of the offer period; or

(b)    if the takeover bid was subject to a defeating condition - after the notice whether the bid is free from a defeating condition or not is given under subsection 630(3) .

SECTION 662B   BIDDER TO TELL REMAINING HOLDERS OF THEIR RIGHT TO BE BOUGHT OUT  
Notice to remaining holders of bid class securities

662B(1)    
The bidder must:

(a)    prepare a notice in the prescribed form that:

(i) states that the bidder and their associates have relevant interests in at least 90% (by number) of the securities in the bid class; and

(ii) informs the holder of bid class securities about their right to be bought out under this Part; and

(iii) sets out the terms on which the holder may be bought out; and

(b)    lodge the notice with ASIC; and

(c)    give the notice to each other person who:

(i) is a holder of securities in the bid class on the day on which the notice is lodged with ASIC; and

(ii) has not been given a compulsory acquisition notice under section 661B when the notice under subsection (2) is given; and

(d)    

give the notice to each relevant market operator on the same day as it is lodged with ASIC if the target is listed.

If alternative forms of consideration were offered under the takeover bid, the notice must specify which of those forms will apply to the acquisition of the holder ' s securities if the holder does not give the bidder an election notice under subsection 662C(1) .

Note: The notice is [ sic ] be given to everyone who holds bid class securities on the day on which the notice is lodged with ASIC. Under section 662C , anyone who acquires the securities after that day may require the bidder to acquire the securities.

Time for dispatching notice to holders

662B(2)    
The bidder must dispatch the notices under paragraph (1)(c) :

(a)    during, or within 1 month after the end of, the offer period; and

(b)    on the day the bidder lodges the notice with ASIC or on the next business day.

The notices cannot be withdrawn.

662B(3) - (4)    
(Repealed by No 69 of 2023, s 3, Sch 1[46] and [ 47] (effective 15 September 2023).)

SECTION 662C   RIGHT OF REMAINING HOLDER OF SECURITIES IN THE BID CLASS TO BE BOUGHT OUT  

662C(1)    
Within 1 month after notice is given in relation to securities under section 662B , the holder of the securities may give the bidder written notice requiring the bidder to acquire the securities. If alternative forms of consideration were offered under the takeover bid, the holder may elect in the notice which of those forms will apply to the acquisition of the holder's securities.

662C(2)    
The notice by the holder gives rise to a contract between the holder and the bidder for the sale of the securities on:

(a)    the terms that applied to the acquisition of securities under the bid immediately before the end of the offer period; or

(b)    if alternative forms of consideration applied at that time - on the terms that the bidder will provide:

(i) the alternative specified by the holder in the notice under subsection (1) ; or

(ii) if the holder has not made an election under that subsection - the alternative set out in the bidder's notice under section 662B ; or

(c)    if the holder and the bidder agree on other terms - those terms.

Division 3 - Compulsory buy-out of convertible securities  

SECTION 663A   BIDDER MUST OFFER TO BUY OUT HOLDERS OF CONVERTIBLE SECURITIES  

663A(1)    
If the bidder and their associates have relevant interests in at least 90% of the securities (by number) in the bid class at the end of the offer period, the bidder must offer to buy out the holders of securities that are convertible into bid class securities in accordance with sections 663B and 663C . This section does not apply to securities if a takeover bid has been made for the convertible securities and a notice has been given under section 661B or 662B in relation to the convertible securities.

Note: For when securities are convertible into bid class securities, see the definition of convertible securities in section 9.

663A(2)    

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

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

SECTION 663B   BIDDER TO TELL HOLDERS OF CONVERTIBLE SECURITIES OF THEIR RIGHT TO BE BOUGHT OUT  
Notice to holders of convertible securities

663B(1)    
The bidder must:

(a)    prepare a notice in the prescribed form that:

(i) states that the bidder and their associates have relevant interests in at least 90% of the securities (by number) in the bid class; and

(ii) informs the holder of convertible securities about their right to be bought out under this Part; and

(iii) sets out the terms on which the holder may be bought out; and

(b)    lodge the notice with ASIC; and

(c)    give each other person who is a holder of convertible securities:

(i) the notice; and

(ii) a copy of the expert ' s report, or of all the experts ' reports, under section 667A ; and

(d) give a copy of those documents to each relevant market operator on the same day as it is lodged with ASIC if the target is listed.

Note 1: Subparagraph (a)(iii) - Section 667A deals with the contents of an expert ' s report.

Note 2: The notice is to be given to everyone who holds convertible securities on the day on which the notice is lodged with ASIC. Under section 663C , anyone who acquires the securities after that day may require the bidder to acquire the securities.

Time for dispatching notice to holders

663B(2)    
The bidder must dispatch the notices and reports under paragraph (1)(c) :

(a)    during, or within 1 month after the end of, the offer period; and

(b)    on the day the bidder lodges the notice with ASIC or on the next business day.

The notices cannot be withdrawn.

663B(3) - (4)    
(Repealed by No 69 of 2023, s 3, Sch 1[48] and [ 49] (effective 15 September 2023).)

SECTION 663C   RIGHT OF HOLDERS OF CONVERTIBLE SECURITIES TO BE BOUGHT OUT  

663C(1)    
Within 1 month after notice under section 663B is given in relation to convertible securities, the holder of the convertible securities may give the bidder a notice requiring the bidder to acquire the securities.

663C(2)    
The holder ' s notice gives rise to a contract between the holder and the bidder for the sale of the securities on:

(a)    the terms agreed to by the bidder and the holder; or

(b)    the terms determined by the Court on application by the holder.

663C(3)    
If the Court makes a determination under paragraph (2)(b) in relation to the terms of sale for a holder ' s securities of a particular class, the determination applies to all holders of securities in that class who have applications to the Court pending for a determination under that paragraph in relation to the terms of sale of their securities.