AUSTRALIA Law and Practice Contributed by: Alberto Colla, Keith Tan, Hugh McDonald and Dean Zinn, MinterEllison
6.10 Squeeze-Out Mechanisms Australian law allows for the compulsory acquisi - tion of remaining shares following a takeover bid when the bidder has an interest in at least 90% of the bid class securities (by number) during or at the end of the bid and has already acquired 75% of the securities (by number) that the bidder made offers for under the bid. 6.11 Irrevocable Commitments Commitments from key target shareholders sup - porting a public M&A transaction are commonly seen in Australia. They usually take the form of a wide variety of acceptance agreements and/ or a positive pubic statement that the share - holder intends to accept the takeover or vote in favour of the scheme (as the case may be). A public intention statement can be as effective as a more formal agreement. This is because of ASIC’s “truth in takeovers” policy, which requires the party making the public statement of support to act consistently with it, as the market will be relying on this to inform trading in the target’s shares. These agreements and public intention state - ments are often qualified by reference to no superior proposal emerging within a certain timeframe. If a superior proposal emerges, the shareholder can revoke their commitment and pursue the superior proposal.
Public M&A Transaction In a public M&A transaction, if a bidder ends up with less than 100%, there is limited scope to secure additional governance rights outside of its shareholding (noting, however, that a major - ity shareholding carries the right to control the composition of the board, being the primary decision-making organ). This is especially the case if the target remains listed on ASX. All ASX-listed companies must have a constitution compliant with the ASX Listing Rules. In a stub- equity transaction, the bidder will co-exist as a shareholder alongside founders, key manage - ment and potentially other target shareholders who have elected to roll over into a holding com - pany controlled by the bidder. In that scenario, the shareholders’ agreement for the holding company will govern the rights and obligations of the relevant shareholders. That agreement will often enshrine additional governance rights in favour of the bidder as the majority shareholder. 6.9 Voting by Proxy In Australia, shareholders can generally vote by appointing a proxy to attend a shareholders’ meeting to vote on their behalf. A proxy may be directed or undirected. The chair of the meeting will usually be named as the proxy, but there are generally no restrictions on appointing someone else. A proxy does not need to be a fellow share - holder. Direct voting is also possible if provisions facili - tating this exist in the company’s constitution. Direct voting allows shareholders to cast their vote on resolutions of a meeting, either online or by completing their personalised voting form, without having to attend the meeting in person and without needing to appoint a proxy to vote on their behalf.
7. Disclosure 7.1 Making a Bid Public
Generally, a target is not required to disclose the receipt of a non-binding indicative takeover pro - posal to ASX. Nevertheless, a target may elect to do so for tactical reasons.
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