• Part 13: Part 13: Acquisition of Minorities in Take-Overs

    • Article 147 - Definitions

      (1) In this Part, a "take-over offer" means an offer to acquire all the Shares, or all the Shares of any class or classes, in a Company (other than Shares which at the date of the offer are already held by the offeror), being an offer on terms which are the same in relation to all the Shares to which the offer relates or, where those Shares include Shares of different classes, in relation to all the Shares of each class.
      (2) In this Article, "Shares" means Shares which have been allotted on the date of the offer but a take-over offer may include Shares that are subsequently allotted before a date specified in or determined in accordance with the terms of the offer.

    • Article 148 - Take-over offers

      (1) The terms offered in relation to any Shares shall for the purposes of this Article 148 be treated as being the same in relation to all the Shares or, as the case may be, all the Shares of a class to which the offer relates notwithstanding any variation permitted by Article 148(2).
      (2) A variation is permitted by this paragraph where:
      (A) the law of a country or territory outside the QFC precludes the acceptance of an offer in the form or the forms specified, or precludes it except after compliance by the offeror with conditions with which he is unable to comply or which he regards as unduly onerous; and
      (B) the variation is such that the persons by whom the acceptance of an offer in that form is precluded are able to accept an offer in a different form but of substantially equivalent value.
      (3) The reference in Article 147(1) to Shares already held by the offeror includes a reference to Shares which he has contracted to acquire (which term shall include Shares which the offeror has an unconditional option to acquire) but shall not be construed as including Shares which are the subject of a contract binding the holder to accept the offer when it is made, being a contract entered into by the holder for nothing other than a promise by the offeror to make the offer.
      (4) Where the terms of an offer make provision for their revision and for acceptances on the previous terms to be treated as acceptances on the revised terms, the revision shall not be regarded for the purposes of this Part as the making of a fresh offer and references in this Part to the date of the offer shall accordingly be construed as references to the date on which the original offer was made.
      (5) In this Part "the offeror" means, subject to Article 154, the person making a take-over offer and "the Company" means the Company whose Shares are the subject of the offer.

    • Article 149 - Right of offeror to buy out minority Members

      (1) If, in a case in which a take-over offer does not relate to Shares of different classes, the offeror has by virtue of acceptances of the offer acquired or contracted to acquire not less than nine-tenths in nominal value of the Shares to which the offer relates he may give notice to the holder of any Shares to which the offer relates which the offeror has not acquired or contracted to acquire that he desires to acquire those Shares.
      (2) If, in a case in which a take-over offer relates to Shares of different classes, the offeror has by virtue of acceptances of the offer acquired or contracted to acquire not less than nine-tenths in nominal value of the Shares of any class to which the offer relates, he may give notice to the holder of any Shares of that class which the offeror has not acquired or contracted to acquire that he desires to acquire those Shares.
      (3) No notice shall be given under Article 149(1) or (2) unless the offeror has acquired or contracted to acquire the Shares necessary to satisfy the minimum specified in those paragraphs before the end of the period of 4 months beginning with the date of the offer; and no such notice shall be given after the end of the period of 2 months beginning with the date on which he has acquired or contracted to acquire Shares which satisfy that minimum.
      (4) When the offeror gives the first notice in relation to an offer he shall send a copy of it to the Company together with a declaration by him stating that the conditions for the giving of the notice are satisfied. A person who makes such a declaration must have reasonable grounds for believing it to be true.
      (5) Where the offeror is a Body Corporate (whether or not a Company within the meaning of these Regulations) the declaration shall be signed by a director.
      (6) If a person is proceeded against in respect of an alleged contravention for failing to send a copy of a notice as required by Article 149(4) it is a defence for him to prove that he took reasonable steps for securing compliance with that paragraph.
      (7) Where during the period within which a take-over offer can be accepted the offeror acquires or contracts to acquire any of the Shares to which the offer relates but otherwise than by virtue of acceptances of the offer, then if:
      (A) the value of that for which they are acquired or contracted to be acquired ("the acquisition value") does not at that time exceed the value of that which is receivable by an acceptor under the terms of the offer; or
      (B) those terms are subsequently revised so that when the revision is announced the acquisition value, at the time mentioned in Article 149(7)(A), no longer exceeds the value of that which is receivable by an acceptor under those terms
      the offeror shall be treated for the purposes of this Article 149 as having acquired or contracted to acquire those Shares by virtue of acceptances of the offer; but in any other case those Shares shall be treated as excluded from those to which the offer relates.
      Amended (as from 5th April 2015).

    • Article 150 - Effect of notice under Article 149

      (1) The following provisions shall, subject to Article 148, have effect where a notice is given in respect of any Shares under Article 149.
      (2) The offeror shall be entitled and bound to acquire those Shares on the terms of the offer.
      (3) Where the terms of an offer are such as to give the holder of any Shares a choice of payment for his Shares the notice shall give particulars of the choice and state:
      (A) that the holder of the Shares may within 6 weeks from the date of the notice indicate his choice by a written communication sent to the offeror at an address specified in the notice; and
      (B) which payment specified in the offer is to be taken as applying in default of his indicating a choice as aforesaid
      and the terms of the offer mentioned in Article 150(2) shall be determined accordingly.
      (4) Article 150(3) applies whether or not any time-limit or other conditions applicable to the choice under the terms of the offer can still be complied with; and if the payment chosen by the holder of the Shares:
      (A) is not cash and the offeror is no longer able to make that payment; or
      (B) was to have been made by a third party who is no longer bound or able to make that payment
      the payment shall be taken to consist of an amount of cash payable by the offeror which at the date of the notice is equivalent to the chosen payment.
      (5) At the end of 6 weeks from the date of the notice the offeror shall forthwith:
      (A) send a copy of the notice to the Company; and
      (B) make payment to the Company for the Shares to which the notice relates.
      (6) The copy of the notice sent to the Company under Article 150(5)(A) shall be accompanied by an instrument of transfer executed on behalf of the Member by a person appointed by the offeror; and on receipt of that instrument the Company shall register the offeror as the holder of those Shares.
      (7) Where the payment referred to in Article 150(5)(B) is to be made in Shares or securities to be allotted by the offeror the reference in that paragraph to the making of payment shall be construed as a reference to the allotment of the Shares or securities to the Company.
      (8) Any sum received by a Company under Article 150(5)(B) and any other payment received under that paragraph shall not be the property of the Company but shall be held by the Company on behalf of the person entitled to the Shares in respect of which the sum or other payment was received.
      (9) Any sum received by a Company under Article 150(5)(B) and any dividend or other sum accruing from any other payment received by a Company under that paragraph, shall be paid into a separate bank account, being an account the balance on which bears interest at an appropriate rate and can be withdrawn by such notice (if any) as is appropriate.
      Amended (as from 5th April 2015).

    • Article 151 - Right of minority Member to be bought out by offeror

      (1) If in a case in which a take-over offer does not relate to Shares of different classes, at any time before the end of the period within which the offer can be accepted:
      (A) the offeror has by virtue of acceptances of the offer acquired or contracted to acquire some (but not all) of the Shares to which the offer relates; and
      (B) those Shares, with or without any other Shares in the Company which he has acquired or contracted to acquire, amount to not less than nine-tenths in nominal value of all the Shares in the Company
      the holder of any Shares to which the offer relates who has not accepted the offer may by a written communication addressed to the offeror require him to acquire those Shares.
      (2) If a take-over offer relates to Shares of any class or classes and at any time before the end of the period within which the offer can be accepted:
      (A) the offeror has by virtue of acceptances of the offer acquired or contracted to acquire some (but not all) of the Shares of any class to which the offer relates; and
      (B) those Shares, with or without any other Shares of that class which he has acquired or contracted to acquire, amount to not less than nine-tenths in nominal value of all the Shares of that class
      the holder of any Shares of that class who has not accepted the offer may by a written communication addressed to the offeror require him to acquire those Shares.
      (3) Within 1 month of the time specified in Article 151(1) the offeror shall give any Member who has not accepted the offer notice of the rights that are exercisable by him under that Article; and if the notice is given before the end of the period mentioned in that Article it shall state that the offer is still open for acceptance.
      (4) A notice under Article 151(3) may specify a period for the exercise of the rights, conferred by this Article and in that event the rights shall not be exercisable after the end of that period; but no such period shall end less than 3 months after the end of the period within which the offer can be accepted.
      (5) Article 151(3) does not apply if the offeror has given the Member notice in respect of the Shares in question under Article 149.
      (6) If the offeror fails to comply with Article 151(3) he and, if the offeror is an Entity, every officer of the Entity who is in default or to whose neglect the failure is attributable, commits a contravention.
      (7) If an offeror other than an Entity is proceeded against in respect of an alleged contravention for failing to comply with Article 151(3) it is a defence for him to prove that he took all reasonable steps for securing compliance with that Article.
      Amended (as from 5th April 2015).

    • Article 152 - Effect of requirement under Article 151

      (1) The following provisions shall, subject to Article 153, have effect where a Member exercises his rights in respect of any Shares under Article 151.
      (2) The offeror shall be entitled and bound to acquire those Shares on the terms of the offer or on such other terms as may be agreed.
      (3) Where the terms of an offer are such as to give the holder of Shares a choice of payment for his Shares the holder of the Shares may indicate his choice when requiring the offeror to acquire them and the notice given to the holder under Article 151(3):
      (A) shall give particulars of the choice and of the rights conferred by this paragraph; and
      (B) may state which payment specified in the offer is to be taken as applying in default of his indicating a choice
      and the terms of the offer mentioned in Article 152(2) shall be determined accordingly.
      (4) Article 152(3) applies whether or not any time limit or other conditions applicable to the choice under the terms of the offer can still be complied with; and if the payment chosen by the holder of the Shares:
      (A) is not cash and the offeror is no longer able to make that payment; or
      (B) was to have been made by a third party who is no longer bound or able to make that payment
      the payment shall be taken to consist of an amount of cash payable by the offeror which at the date when the holder of the Shares requires the offeror to acquire them is equivalent to the chosen payment.

    • Article 153 - Applications to the QFC Civil and Commercial Court

      (1) Where a notice is given under Article 149 to the holder of any Shares the QFC Civil and Commercial Court may, on an application made by him within 6 weeks from the date on which the notice was given:
      (A) order that the offeror shall not be entitled and bound to acquire the Shares; or
      (B) specify terms of acquisition different from those of the offer.
      (2) If an application to the QFC Civil and Commercial Court under Article 153(1) is pending at the end of the period mentioned in Article 150(5) that Article shall not have effect until the application has been disposed of.
      (3) Where the holder of any Shares exercises his rights under Article 151 the QFC Civil and Commercial Court may, on an application made by him or the offeror, order that the terms on which the offeror is entitled and bound to acquire the Shares shall be such as the QFC Civil and Commercial Court thinks fit.
      (4) No order for costs or expenses shall be made against a Member making an application under Article 153(1) or (3) unless the QFC Civil and Commercial Court considers:
      (A) that the application was unnecessary, improper or vexatious; or
      (B) there has been unreasonable delay in making the application or unreasonable conduct on his part in conducting the proceedings on the application.
      (5) Where a take-over offer has not been accepted to the extent necessary for entitling the offeror to give notices under Article 149(1) or (2) the QFC Civil and Commercial Court may, on the application of the offeror, make an order authorising him to give notices under that Article if satisfied:
      (A) that the offeror has after reasonable enquiry been unable to trace one or more of the persons holding Shares to which the offer relates;
      (B) that the Shares which the offeror has acquired or contracted to acquire by virtue of acceptances of the offer, together with the Shares held by the person or persons mentioned in sub-paragraph (A), amount to not less than the minimum specified in that Article; and
      (C) that the terms offered are fair and reasonable
      but the QFC Civil and Commercial Court shall not make an order under this Article unless it considers that it is just and equitable to do so having regard, in particular, to the number of Members who have been traced but who have not accepted the offer.
      Amended (as from 5th April 2015).

    • Article 154 - Joint offers

      (1) A take-over offer may be made by two or more persons jointly and in that event this Part has effect with the following modifications.
      (2) The conditions for the exercise of the rights conferred by Articles 149 and 151 shall be satisfied by the joint offerors acquiring or contracting to acquire the necessary Shares jointly (as respects acquisitions by virtue of acceptances of the offer) and either jointly or separately (in other cases); and, subject to the following provisions, the rights and obligations of the offeror under those Articles and Articles 150 and 152 shall be respectively joint rights and joint and several obligations of the joint offerors.
      (3) It shall be a sufficient compliance with any provision of those Articles requiring or authorising a notice or other Document to be given or sent by or to the joint offerors that it is given or sent by or to any of them; but the declaration required by Article 149(4) shall be made by all of them and, in the case of a joint offeror being an Entity, signed by a director of that Entity.
      (4) In Article 148, Article 150(7) and Article 153 references to the offeror shall be construed as references to the joint offerors or any of them.
      (5) In Article 150(6) references to the offeror shall be construed as references to the joint offerors or such of them as they may determine.
      (6) In Article 150(4)(A) references to the offeror being no longer able to make the relevant payment shall be construed as references to none of the joint offerors being able to do so.
      (7) In Article 153 references to the offeror shall be construed as references to the joint offerors except that any application under paragraph (3) or (5) may be made by any of them and the reference in sub-paragraph (5)(A) to the offeror having been unable to trace one or more of the persons holding Shares shall be construed as a reference to none of the offerors having been able to do so.

    • Article 155 - Associates

      (1) The requirement of Article 147(1) that a take-over offer must extend to all the Shares, or all the Shares of any class or classes, in a Company shall be regarded as satisfied notwithstanding that the offer does not extend to Shares which associates of the offeror hold or have contracted to acquire; but Shares which any such associate holds or has contracted to acquire, whether at the time when the offer is made or subsequently, shall be disregarded for the purposes of any reference in this Part to the Shares to which a take-over offer relates.
      (2) Where during the period within which a take-over offer can be accepted any associate of the offeror acquires or contracts to acquire any of the Shares to which the offer relates, then, if the condition specified in Article 149(8)(A) or (B) is satisfied as respects those Shares they shall be treated for the purpose of that Article as Shares to which the offer relates.
      (3) In Article 151(1)(B) and Article 151(2)(B) the reference to Shares which the offeror has acquired or contracted to acquire shall include a reference to Shares which any associate of his has acquired or contracted to acquire.
      (4) In this Article 155, "associate", in relation to an offeror, means one or more of the following:
      (A) a nominee of the offeror;
      (B) a Holding Company, Subsidiary or fellow Subsidiary of the offeror or a nominee of such a Holding Company, Subsidiary or fellow Subsidiary; or
      (C) a Body Corporate in which the offeror is substantially interested.
      (5) For the purposes of Article 155(4)(B) a Company is a fellow Subsidiary of another Body Corporate if both are Subsidiaries of the same Body Corporate but neither is a Subsidiary of the other.
      (6) For the purposes of Article 155(4)(C) an offeror has a substantial interest in a Body Corporate if:
      (A) that body or its directors are accustomed to act in accordance with his directions or instructions; or
      (B) he is entitled to exercise or control the exercise of one-third or more of the voting power at general meetings of that body; or
      (C) he owns or controls directly or indirectly more than 20 percent of the Share capital.
      (7) Where the offeror is an individual his associates shall also include his spouse and any child or step-child of his.
      Amended (as from 5th April 2015).