Mergers & Acquisitions
6. Off-Market Takeover Bids
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 22 Aug 2015
- An off-market takeover bid occurs at the bidders' initiative and is usually an offer to purchase all the shares held by any target shareholders.
- There are some compulsory acquisition thresholds. This means that a 90% relevant interest in shares must be acquired as well as 75% of any non-bidder shares.
- There is generally no need to involve a court in an off-market takeover bid unless the Australian Securities and Investments Commission (ASIC) challenges the bid. The Takeovers Panel will be responsible for resolving any challenges.
- As the bidder you will be required to prepare an offer document called a 'bidder's statement.' This statement must include any offer terms, sources of funding, intentions for the future of the target and any other relevant and material information.
- As the target company you will have to respond with a 'target statement' containing any recommendations relating to the merger proposal from the board of directors. All information that would be required to decide whether to accept the offer should be included for consideration.
- Generally an off-market takeover bid is less flexible than a scheme of arrangement.
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