Table 1. Current procedures regulating takeovers and reconstructions

Full takeover offer needs acceptances by more than 50% of the total voting rights in target company. A vote on an acquisition or allotment excludes the buyers/sellers and their associates. The higher the level of control sought, the higher the effective voting threshold.

A takeover offer can be extended to up to 90 days (and up to 150 days in total in some circumstances). Conditions must be met no more than 30 days after offer closes.

75% approval by those present (or by proxy) at shareholders' meeting and entitled to vote. No minimum % of total voting rights required for approval.

Approval is obtained at a single shareholders meeting. If either company is listed, related parties can't vote.

Minorities may be able to require company to buy-out their shares, if they voted against the proposal. No apparent time limits on conditions.

Courts have not been tested on tolerance to lengthy/substantial conditionality of proposals.

75% approval of a Court-approved scheme by those present (or by proxy) at a shareholders' meeting and entitled to vote. No minimum % of total voting rights required for approval

Court must be satisfied of compliance with statute and that the scheme was such that an intelligent and honest person ... might reasonably approve. Panel has decided it will seek to be heard by the Court and can make submissions.

Courts have not been tested on tolerance to lengthy/substantial conditionality of proposals.

Available once a person reaches 90% or more of the voting rights. The Code sets out how the compulsory sale price will be determined.

If approved by 75% of those present (or by proxy) and entitled to vote, all shares of the amalgamating company are surrendered for shares in continuing company or other consideration. No minimum % of total voting rights required for approval.

If approved by 75% of those present (or by proxy) and entitled to vote, all shares are surrendered for shares in continuing company or other consideration. No minimum % of total voting rights required for approval.

Prescribed information, such as directors' recommendation, information about the offeror, disclosure about any agreements by other shareholders, or likely material changes to the business of the target (if offeror gains control of company), and an independent adviser's report.

Information (provided by the interested parties) must 'enable a reasonable shareholder to understand the nature and implications' of the proposal. No independent adviser's report required (except under the Listing Rules for listed companies).

S220 sets out in general terms the information a proposal must contain, but it's minimal by comparison with Code requirements and has no specifically mandated information.

Information (provided by the interested parties) must give all the information reasonably necessary to enable the recipients to judge and vote upon the proposal, but tends to be minimal by comparison with Code requirements and has no specifically mandated information. No independent adviser's report required.

Panel actively monitors takeover activity. Panel makes temporary restraining orders and permanent compliance orders on its own initiative or following complaints.

Low cost and easy access for complainants. Panel has the option of recovering costs from a complainant if no breach is found. Those found in breach pay Panel's costs for enforcement action.

Companies Office reviews compliance with Part 13 procedural requirements on filing of amalgamation documents, after shareholders have approved the amalgamation. Shareholders can complain to the relevant MED unit investigating Companies Act breaches and unit may prosecute. This can result in penalties, but would not halt or amend an amalgamation.

Shareholders can apply to the High Court to prevent an amalgamation under s 226 Companies Act.

No routine monitoring of compliance by any regulatory agency.

The High Court approves arrangements, amalgamations and compromises under s 236. This includes approval of scheme documents, calling of meetings and meeting procedures prior to the putting of the scheme to shareholders and final approval post shareholders' meetings.

Shareholders can take Court action or complain to the MED National Enforcement Unit in case of breaches.

Process costs and timeliness

Bidder gives takeover notice, with draft offer doc to target. Needs separate independent adviser certification if more than one class of securities. Target prepares target company statement and sends to shareholders, with independent adviser report on merits of offer.

As proposals must be approved by boards of amalgamating companies, negotiations precede any proposal being put to shareholders. Proposal to be sent to each shareholder not less than 20 days before takes effect, give public notice, hold a shareholders' meeting, directors' certification, and register the documents.

As proposals must be approved by boards of the applicant companies, negotiations precede any application to the Court. Involves appearances at hearings for initial orders and for final orders, provide scheme proposal to Court, hold a shareholders' meeting, deliver Court order to the Registrar within 10 working days.