The level of control selected under Australian law as the trigger for the takeover legislation is 20% of voting power in a company or MIS. The key provision is section 606 of the Corporations Act. This section prohibits an acquisition of shares in a company if, after the acquisition: 1630039_1_takeovers guide - australia final page | 2 any person’s voting power in the company would increase beyond the 20% threshold; or any person’s voting power in a company that is above 20% and below 90% increases. The takeover rules do not apply where voting power remains below the 20% level after an acquisition, although other rules, such as those requiring declaration of substantial shareholdings (which exceed 5%), are relevant. There are a number of important gateways which allow a person to exceed the 20% level. Permitted gateways include: an off-market takeover bid made to all shareholders which may be for all or a nominated proportion of their shareholding; an unconditional on-market takeover bid on the ASX; “creeping” acquisitions of not more than 3% of voting shares in every six months, by a person already holding at least 19% of voting power in the company;
So this indeed may well be why we have seen a lull in activity in recent months from AU Mining at least.
ATV Price at posting:
3.2¢ Sentiment: Buy Disclosure: Held
