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 .

PART 6.6 - VARIATION OF OFFERS  

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

SECTION 650B   OFF-MARKET BIDS - CONSIDERATION OFFERED  

Improving the consideration offered

650B(1)    
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.

Effect of increase in consideration on offers already accepted

650B(2)    

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 form of consideration being offered	entitled to the improved consideration
2	2 or more forms of consideration offered and all forms improved by the same factor or percentage	entitled to the improvement in the form of consideration accepted
3	2 or more forms of consideration offered and improvement in the consideration is identical for all forms	entitled to the improvement in the form of consideration accepted
4	addition of a new form of consideration	entitled to make a fresh 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

650B(2A)    

The person is entitled to receive the improved consideration immediately, subject to the following paragraphs:

(a)    if the time for payment of the consideration in accordance with subsection 620(2) has not yet occurred, the person is not entitled to receive the improved consideration until that time;

(b)    if the person has to make an election before being entitled to the improved consideration, the person is not entitled to receive the improved consideration until the later of:

(i) the time when the election is made; and

(ii) the time applicable under paragraph (a).

Fresh election as to the form of consideration

650B(3)    
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.

Strict liability offences

650B(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 .