Ann: Change in substantial holding, page-14

Mergers & Acquisitions (M&A) Process for ASX-Listed Companies

The process of acquiring an ASX-listed company generally follows two main approaches:

1. Friendly Takeover – The target company's board agrees to the acquisition.
2. Hostile Takeover – The acquirer directly approaches shareholders without board approval.

1. Pre-Acquisition Phase (Planning & Due Diligence)

• Target Identification: The acquiring company or fund identifies a suitable ASX-listed target.
• Regulatory Review: Compliance with the Corporations Act 2001, ASX Listing Rules, and competition laws (Competition and Consumer Act 2010).
• Funding Strategy: The acquirer secures funding through cash reserves, loans, or share exchanges.

2. Offer & Negotiation Phase

✅ Friendly Takeover Process

1. Negotiation with the Target Company – The acquiring entity negotiates terms with the target's board.
2. Scheme of Arrangement – A court-approved agreement where at least 50% of shareholders and 75% of voting shareholders must approve.
3. Regulatory Approvals – Australian Securities and Investments Commission (ASIC) and, if applicable, the Foreign Investment Review Board (FIRB).
4. Final Court Approval – Once approved, the merger is executed.

❌ Hostile Takeover Process

1. Takeover Bid Announcement – The acquirer makes a direct offer to shareholders.
2. Regulatory Compliance – ASIC and FIRB review the offer.
3. Shareholder Engagement – The acquirer persuades shareholders to sell their shares.
4. Ownership Thresholds:
   • 50% or more → Effective control.
   • 90% or more → Can enforce a compulsory acquisition (squeeze-out).

3. Post-Acquisition & Integration

• Transaction Completion – Funds are transferred, and shares are reallocated.
• Corporate Restructuring – New management or operational changes may take place.
• ASX & Regulatory Filings – Final reports submitted to ASX and ASIC.

Key Regulations & Considerations

• Takeover Threshold: If an entity acquires more than 20% of a company, it must follow formal takeover procedures.
• Foreign Investment Restrictions: Foreign entities require FIRB approval for significant acquisitions.
• Defensive Measures: Target companies may employ strategies like a poison pill to resist hostile takeovers.