Some facts: 8. Schemes of arrangement (for companies) > A scheme...

Some facts:

8. Schemes of arrangement (for companies)

• >  A scheme of arrangement can be used only for a friendly acquisition of a company, and is frequently used to effect 100% acquisitions.
• >  A scheme of arrangement is a shareholder and court-approved statutory arrangement between a company and its shareholders that becomes binding on all shareholders by operation of law.
• >  Schemes are subject to fewer prescriptive rules than takeover bids and therefore can be more flexible, but are supervised by ASIC and the courts.
• >  A standard scheme involves:

• a scheme implementation agreement between the bidder and the target;
• the preparation by the target, with input from the bidder, of a draft ‘scheme booklet’ which is given to ASIC for review;
• the target seeking court approval for the despatch of the scheme booklet to target shareholders and court orders for the convening of the shareholders’ meeting to vote on the scheme (ie. the scheme meeting);
• holding the scheme meeting;
• the target seeking court approval for the
implementation of the scheme; • implementing the scheme; and • de-listing the target from ASX.