THE CORPORATIONS LAW

CHAPTER 6 - TAKEOVERS

PART 6.6 - VARIATION OF OFFERS

Division 2 - Off-market bids (express variation by bidder)

SECTION 650B   OFF-MARKET BIDS - CONSIDERATION OFFERED  

650B(1)  Improving the consideration offered.  

The bidder may vary the offers made under the bid to improve the consideration offered:

(a)  by increasing a cash sum offered; or

(b)  by increasing the number of securities offered; or

(c)  by increasing the rate of interest payable under debentures offered; or

(d)  by increasing the amount or value of debentures offered; or

(e)  by increasing the number of unissued securities that may be acquired under options offered; or

(f)  by offering a cash sum in addition to securities; or

(g)  if the securities being acquired include shares to which rights to accrued dividends are attached - by giving the holders the right to:

(i) retain the whole or a part of the dividend; or

(ii) be paid an amount equal to the amount of the dividend;

in addition to the consideration already offered; or

(h)  offering an additional alternative form of consideration.

Note:

If the bidder increases the consideration during the last 7 days of the offer period, subsection 624(2) extends the offer period by a further 14 days.

650B(2)  Effect of increase in consideration on offers already accepted.  

Improving the consideration has the effects set out in the following table on the rights of a person who has already accepted an offer when the variation is made.

-------------------------------------------------------
Effect of improving consideration           [operative]
-------------------------------------------------------
    Improvement               Effect on person who has
                              already accepted bid 
                              offer
-------------------------------------------------------
 1 improvement of the only    entitled to the improved
   form of consideration      consideration       
   being offered
-------------------------------------------------------
 2 2 or more forms of         entitled to the 
   consideration offered      improvement in the form 
   and all forms improved     of consideration accepted
   by the same factor or
   percentage
-------------------------------------------------------
 3 2 or more forms of         entitled to the 
   consideration offered      improvement in the form
   and improvement in         of consideration accepted
   the consideration is
   identical for all forms
-------------------------------------------------------
 4 addition of a new form     entitled to make a fresh 
   of consideration           election as to the form
                              of consideration to be
                              taken
-------------------------------------------------------
 5 any other improvement      entitled to make a fresh 
                              election as to the form 
                              of consideration to be
                              taken
-------------------------------------------------------
      

The person is entitled to receive the improved consideration immediately, or immediately after the exercise of the election.

650B(3)  Fresh election as to the form of consideration.  

If a person who has already accepted an offer has the right to make a fresh election as to the form of consideration to be taken, the bidder must send the person as soon as practicable after the variation a written notice informing them about their right to make the election.

Note 1:

Section 651B says how the election is to be exercised.

Note 2:

Sections 648B and 648C provide for the manner in which documents may be sent to holders.