Jake, H & interested othersFound this, sorry its a long story...

Jake, H & interested others

Found this, sorry its a long story from my advisers Mr Cut & Mr Paste.

This may be of interest, but I would bet 100% that STO has had all possibilities covered by legal advise

The link is

http://www.blakedawson.com/Templates/Publications/x_publication_content_page.aspx?id=57581

TAX BULLETIN
20 January 2010
Reforms to the capital gains tax scrip-for-scrip roll-over rules

Background
In Australia, a two-tiered regime exists for the control of shares in Australian companies. Firstly, mergers and takeovers of listed entities and unlisted companies with more than 50 members (regulated entities) are regulated by Chapter 6 of the Corporations Act. Conversely, mergers and takeovers of entities not fulfilling those requirements are not subject to a specific regulatory regime (unless effected through a scheme of arrangement).
For regulated entities, mergers are principally undertaken either through a takeover bid or a scheme of arrangement (regulated under Part 5.1 of the Corporations Act). A takeover bid is an offer made to all securityholders of the target in a particular class of securities (bid class), and relies on individual acceptances of the offer by each securityholder.
By contrast, a scheme of arrangement must be approved by a court as well as by the members of a company (for each class of affected member, by a majority of the members (by number) present and voting at a general meeting, who represent 75% of the votes cast).
In any takeover or merger, two of the key requirements for a shareholder to qualify for scrip-for-scrip roll-over relief are the �comprehensive coverage� and �same terms� tests contained within subsections 124-780(2)(b) and 124-780(2)(c) of the Tax Act, which provide the following:
The *arrangement must �
(b) be one in which at least all owners of *voting shares in the original entity (except a company referred to in paragraph (a)) could participate; and
(c) be one in which participation was available on substantially the same terms for all of the owners of interests of a particular type in the original entity.
These subsections effectively require the acquiring company to provide all voting shareholders of the target company with the opportunity to participate in the offer (the "comprehensive coverage" test), with such participation being on the "same terms" for all owners of particular classes of shares. If, for example, a major shareholder was prepared to receive different consideration to other shareholders to guarantee an exit, the conditions may not be met, and none of the shareholders in the target could claim roll-over relief.
Under the Corporations Act the policy goal of ensuring all shareholders are treated equally or fairly is addressed differently. There is no parallel condition to the "same terms" test in the context of mergers by scheme of arrangement. If shareholders are to participate on materially different terms, a court is likely to divide shareholders into separate "classes" in which case the approval thresholds discussed above must be met in relation to each class.
In the context of a takeover bid, the Corporations Act requires an offer to be made for all (or a specified portion of) securities in a particular bid class on the same terms. This achieves a similar effect to the "comprehensive coverage" and "same terms" tests assuming, as is usually the case, there is one class of voting share being bid for and all shareholders are free to accept the same offer consideration alternatives.
Notwithstanding compliance with the Corporations Act requirements, scrip-for-scrip roll-over may not be available if, for example, under a scheme of arrangement, an entity offers scrip consideration to a controlling shareholder but cash to minority shareholders, as the "same terms" requirement would not be fulfilled. The "same terms" limb of the scrip-for-scrip roll-over rules would require the same composition of consideration to be offered to all shareholders of a particular class, in order to obtain the roll-over.
Therefore, in certain takeovers and mergers at present, scrip-for-scrip roll-over may not be available to shareholders who participate in scrip transactions, even though such a takeover or merger complies with the Corporations Act. Accordingly, a "mismatch" exists in the treatment of takeovers and mergers between the scrip-for-scrip roll-over provisions and the Corporations Act.
Proposed amendments
Under the proposed changes, shareholders in a target entity may qualify for scrip-for-scrip roll-over without satisfying the "comprehensive coverage" and "same terms" requirements in subsections 124-780(2)(b) and (c) (for companies) or 124-781(2)(b) and (c) (for trusts) of the Tax Act, if:
the target entity is subject to Chapter 6 of the Corporations Act (eg a listed entity or an unlisted company with more than 50 members); or
the arrangement is a scheme of arrangement (within the meaning of section 411 of the Corporations Act), that has received Court and member approval.
The practical impact of the proposed changes should be that in some cases differential bid consideration can be offered to the shareholders of a target company (ie a different composition of scrip and cash may be offered to certain shareholders), and it may not be necessary for all holders of "voting shares" to be entitled to participate (and scrip-for-scrip roll-over may still be available). However, note that the relevant "arrangement" must still comply with the Corporations Act and result in the bidder holding 80% or more of the voting shares in the target. We expect that the additional flexibility this allows in a takeover bid context will be limited, given the requirement for offers to be made on the same terms to all recipients.
Mergers will still need to satisfy any other relevant conditions required for the roll-over, and other arrangements (that are not governed by Chapter 5 or Chapter 6 of the Corporations Act) will continue to be subject to all the existing scrip-for-scrip roll-over requirements.
However, these amendments will, at least, better align the scrip-for-scrip roll-over rules with the regulation of mergers by the Corporations Act.
Commencement of changes
The changes will apply to takeovers and mergers which occur on or after 6 January 2010, and the Government will consult on the design of the legislation until 5 February 2010. Following consultation, the Government will release an exposure draft of the legislation later this year.
Written with the assistance of Alexis Fong, Seasonal Clerk.
Authors
End of Story

Cheers Mattocks