Gilbert + tobin - Gilbert and Tobin

4.1 Permitted means of acquiring more than 20%
The two primary ways in which an investor can acquire a holding of more than 20% in a listed company are by a takeover bid and a
scheme of arrangement. The key features are described below:
Issue Takeover bid Scheme of arrangement
Agreed or contested A takeover bid can be used for either agreed
acquisitions or acquisitions which are
contested / hostile.
A scheme of arrangement requires the cooperation
of the target company, so can only be used in an
agreed transaction.
Offer price
The acquirer can offer cash, shares in itself (or a
related company), a combination of cash and shares,
or a choice between various forms of payment.
The acquirer can offer cash, shares in itself (or a
related company), a combination of cash and shares,
or a choice between various forms of payment.
Process
The acquirer sends a bidder’s statement to all target
company shareholders, providing details of the offer,
source of funds, intentions in relation to the target
and the formal offer terms.
The target company prepares a notice of meeting
and explanatory statement, including the directors’
recommendation, for a meeting to approve the
proposed scheme of arrangement. The bidder will
provide information required for the notice of
The target company sends a target’s statement to all
meeting.
shareholders, containing the directors’
recommendation whether to accept or reject the
bid.
The Australian Securities and Investments
Commission is given at least two weeks to review
the draft, before the target company seeks court
The shareholders must be given at least one month
approval to convene the meeting.
to accept the offer (although it usually takes more
than one month to satisfy all conditions). The offer
can be extended for up to 12 months to allow
conditions to be satisfied.
Payments to shareholders are made when all
conditions are satisfied or waived.
The meeting documents are sent to shareholders, at
least 28 days before the meeting.
If shareholders approve the transaction, a final court
approval is obtained.
Payments to shareholders are then made.
Conditions
An offer will typically be subject to conditions such
as:
An offer will typically be subject to conditions such
as:
+ + minimum acceptances;
+ + regulatory approvals (e.g. foreign investment or
merger clearance); and
+ + no material adverse change in the target’s
business.
+ + regulatory approvals (e.g. foreign investment or
merger clearance);
+ + no material adverse change in the target’s
business; and
+ + no change in the directors’ recommendation.
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