THE CORPORATIONS LAW

CHAPTER 6A - COMPULSORY ACQUISITIONS AND BUY-OUTS

PART 6A.2 - GENERAL COMPULSORY ACQUISITIONS AND BUY-OUTS

Division 1 - Compulsory acquisition of securities by 90% holder

SECTION 664A   THRESHOLD FOR GENERAL COMPULSORY ACQUISITION POWER  

664A(1)  90% holder - holder of 90% of securities in particular class.  

A person is a 90% holder in relation to a class of securities of a company if the person holds, either alone or with a related body corporate, full beneficial interests in at least 90% of the securities (by number) in that class.

664A(2)  90% holder - holder with 90% voting power and 90% of whole company or scheme.  

A person is also a 90% holder in relation to a class of securities of a company if:

(a)  the securities in the class are shares or convertible into shares; and

(b)  the person's voting power in the company is at least 90%; and

(c)  the person holds, either alone or with a related body corporate, full beneficial interests in at least 90% by value of all the securities of the company that are either shares or convertible into shares.

Note:

Subsection 667A(2) provides that the expert's report that accompanies the compulsory acquisition notice must support the paragraph (c) condition.

664A(3)  90% holder may acquire remainder of securities in class.  

Under this section, a 90% holder in relation to a class of securities of a company may compulsorily acquire all the securities in that class in which neither the person nor any related bodies corporate has full beneficial interests if either:

(a)  the holders of securities in that class (if any) who have objected to the acquisition between them hold less than 10% by value of those remaining securities at the end of the objection period set out in the notice under paragraph 664C(1)(b); or

(b)  the Court approves the acquisition under section 664F.

If subsection (2) applies to the 90% holder, the holder may compulsorily acquire securities in a class only if the holder gives compulsory acquisition notices in relation to all classes of shares and securities convertible into shares of which they do not already have full beneficial ownership.

Note:

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

664A(4)  [Constitution]  

This section has effect despite anything in the constitution of the company whose securities are to be acquired.

664A(5)  [Inapplicability of Part]  

This Part does not apply to shares that give the shareholder, as a shareholder, a right to occupy or use real property that the company owns or holds under lease, whether the right is a lease or licence or a contractual right.

664A(6)  [When power to acquire ends]  

The 90% holder's power to compulsorily acquire securities under a notice given under section 664C ends if the 90% holder contravenes section 664D by offering benefits outside the terms proposed in the compulsory acquisition notice under section 664C.