AUSTRALIA Law and Practice Contributed by: Alberto Colla, Keith Tan, Hugh McDonald and Dean Zinn, MinterEllison
is called “bidder’s statement” and its content is highly regulated. The target formally responds to the bidder’s statement with its “target’s statement” , which must include a statement from each director rec - ommending that shareholders either accept or reject the offer. The recommendation is typically (although not always) unanimous and supported by a set of collective reasons. 6. Structuring 6.1 Length of Process for Acquisition/ Sale Private-Treaty M&A Transaction In a private-treaty M&A transaction, the period between the submission of the non-binding indicative offer and the signing of a definitive agreement varies considerably. The length of time depends on the level of due diligence required by the prospective acquirer, the extent of issues arising from due diligence, any pauses in negotiations due to commercial impasses and the complexity of the transaction docu - ments (typically negotiated concurrently with due diligence). In turn, the time between signing a definitive sale agreement and completion can take anywhere between days, weeks or months. The timeframe depends on numerous factors, including the timing for receipt of regulatory approvals, the receipt of third-party consents to change in control of the target or assignment of key contracts, the timeframe for when the acquirer’s funding becomes available, and the overall complexity of the transaction. Public M&A Transaction In a public M&A transaction, the period between the submission of the non-binding indicative offer and the signing of a definitive agreement
also varies considerably. The time required for a private treaty process depends on the same fac - tors described above. Once a definitive agree - ment is signed, statutory timeframes govern the period to closing. These differ depending on whether the transaction is proceeding as a takeover (tender) offer or a scheme. Tender offer For a tender offer, the minimum offer period is one month, but most bidders commence with a slightly longer offer period. In any event, the initial offer period is invariably extended at least once to provide extra time for receipt of regula - tory approvals and to deal with typical devel - opments in the offer process, including satis - faction or waiver of conditions, price increases, emergence of competing proposals, etc. Certain extensions in the offer period occur automatical - ly by law (eg, by 14 days if the bidder increases the offer consideration or if the bidder’s voting power in the target increases to more than 50% within the last seven days of the offer period). The maximum offer period is 12 months. Scheme of arrangement For a scheme of arrangement, due to the various embedded timeframes that apply to the sequen - tial steps in the process, the shortest possible length of time between signing the definitive agreement and closing is approximately two months. Typically, due to external factors such as delays in receiving regulatory approvals, the emergence of a competing offer or shareholder activism, the timeframe can be extended to any -
where from three months to a year. 6.2 Mandatory Offer Threshold
Australia does not have a mandatory takeover- offer threshold, a threshold above which a fol - low-on takeover bid must be made to all other shareholders. Rather, the primary rule is the 20%
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