Full terms of securities to be included with Class Notices

Published 26 October 2018

Rule 42A requires target companies to provide to an offeror a class notice within two days of receiving a takeover notice. Rules 42A(3) and (4) provide that:

(3) The class notice must contain sufficient information about each class of equity security (in the case of a full offer) or voting security (in the case of a partial offer) to enable–

(a) the offeror to formulate an offer; and

(b) an independent adviser to provide a report under rule 22.

(4) In subclause (3), sufficient information includes the terms of issue of each relevant class of security and the number of those securities on issue in each class, as at the date of the class notice.

The clear intent of Rule 42A is to provide adequate information to offerors and independent advisers (including information that may not otherwise be public), so that offerors can formulate their offers and advisers can provide advice on the fairness of the offer between classes. For example, where a class notice relates to a class of performance rights or options issued under a long-term incentive plan, ‘sufficient information’ will include a copy of the relevant plan rules, which should be attached to the class notice.

If parties have any questions about the scope of ‘sufficient information’, they should contact the Panel executive.