AUSTRALIA Law and Practice Contributed by: John Schembri and Erin Cartledge, Gilbert + Tobin
This will mean that certain takeovers above a threshold cannot proceed without approval from the Australian Competition and Consumer Commission (ACCC). The new system formally commences on 1 January 2026. However, par- ties may voluntarily notify acquisitions to the ACCC under the new system from 1 July 2025, before the mandatory notification requirements and other remaining aspects of the system com- mence on 1 January 2026. This means that deal strategy should already be taking the options created by the changes into account, particularly for large or complex multi-jurisdictional transac- tions. However, there remains a lot of importance guidance still to come from the government, which is currently consulting on proposed noti- fication thresholds and forms. 9.2 Listed Targets There are two principal methods of acquiring control of an Australian publicly listed company or managed investment scheme. These are pur- suant to either a takeover bid or a scheme of Chapter 6 of the Corporations Act provides the framework for a takeover bid. A takeover bid can be made on an “on-market” or “off-market” basis and either “hostile” or “friendly” basis. For both on-market and off-market bids, a bidder must prepare and send to the target security holders a document (known as “bidder’s statement” ) that includes details of the offer, information about the bidder and certain other prescribed informa- tion (eg, in relation to the bidder’s intentions). The target must respond by preparing and issu- ing “target’s statement” , including the target board’s recommendation as to whether security holders should accept the offer, as well as any other material information. arrangement. Takeover Bids
An on-market bid is made through a broker and can only be used to acquire securities in a listed entity. On-market bids are far less common than off-market bids because they require the consid- eration to be 100% cash and, importantly, are required to be made on an unconditional basis. Accordingly, it will often be the case that an on- market bid is not a viable option – eg, because the bidder requires regulatory approvals or other conditionality, or because the bidder’s financing arrangements require security to be taken over the target’s assets (which can only be assured in a 100% ownership scenario). An off-market bid essentially takes the form of a written offer to security holders to purchase all or a specified proportion of their securities. The con- sideration can take the form of cash or securities or a combination of the two. The offer must be open for acceptance for no less than one month and no more than 12 months. All offers made under an off-market bid must be the same. An off-market bid may be subject to any condi- tions the bidder chooses, other than conditions that are solely within the control of the bidder (or that turn on the bidder’s state of mind) and certain other prohibited conditions. Typical conditions include those relating to: • the non-occurrence of certain statutorily pre- scribed events (including certain insolvency- type events); • the non-occurrence of a material adverse effect; • the obtaining of any necessary regulatory approvals; • the absence of any legal restraints or prohibi- tions on the acquisition’s completion; and • the receipt of a minimum number of accept- ances (usually 50% or 90%, with the latter
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