A takeover bid involves a potential acquirer making an offer to...

A takeover bid involves a potential acquirer making an offer to all shareholders of the company to acquire their shares on the same terms. The offer must be included in a bidder’s statement prepared in accordance with the requirements of takeover laws.

Acquisition of control of an Australian company can also be achieved under Chapter 5 of the Corporations Act using a scheme of arrangement. Rather than the acquirer making takeover offers directly to target shareholders, the target company proposes a scheme for approval by its members under which 100% of the target shares are transferred to the acquirer or cancelled in return for payment (including, but not limited to, scrip and/or cash) from the acquirer.

In either circumstance the company may make a recommendation to shareholders on whether the board thinks shareholders should accept an offer or not. In the first situation shareholders would receive paperwork from the acquirer on whether they accept the offer or not. In the second situation the offer is put to the company and the company informs shareholders that an offer has been made. Shareholders vote on whether to accept the offer or not. In either circumstance it is the majority of votes (1 share 1 vote) as per randosmits post that determines the outcome.