CODEWORD

Introduction

Following recent transactions, the Panel has updated the following Guidance Notes:

• Defensive Tactics;
• Offer Documents and Variations; and
• Unlisted Code Companies.

Broadly, the updates reflect how the Panel has approached certain issues in transactions, recent law reform and a general review of the relevant Guidance Notes.

The updated versions of the Guidance Notes, along with comparison versions showing all changes, are available on the Panel’s website here.

Revisions to the Panel’s Guidance Note on Defensive Tactics

The Panel considered several issues related to defensive tactics in relation to the withdrawn partial takeover offer for Vital Limited by Empire Technology Limited. In addition, the Panel has recorded in guidance its position regarding the lack of application of defensive tactics restrictions to schemes of arrangement.

In summary, the principal updates:

• provide an updated example of how a target company’s refusal to provide due diligence information will not amount to defensive tactics under rule 38;
• clarify the potential to use enforceable undertakings to resolve issues with defective takeover notices; and
• clarify that defensive tactics restrictions under the Code do not apply to schemes of arrangement and addressing statements by an acquirer in the context of a scheme of arrangement that a bona fide offer is imminent.

In addition, the Panel has relocated certain guidance discussing defensive tactics and due diligence conditions between the Panel’s Guidance Note on Offer Documents and the Guidance Note on Defensive Tactics to remove repetition and place the content where it fits best.

Revisions to the Panel’s Guidance Note on Offer Documents and Variations

The amendments to this Guidance Note arise out of the withdrawn partial takeover offer for Vital Limited by Empire Technology Limited and the completed takeover of Rural Equities Limited.

In summary, the principal updates:

• bring the Panel’s approach to unincorporated joint venture structures into guidance (the Panel’s approach had previously been set out in CodeWord 41); and
• note that due diligence conditions can present rule 64 issues.

In addition, as noted, the Panel has relocated certain guidance discussing defensive tactics and due diligence conditions between the Panel’s Guidance Note on Offer Documents and Variations and the Guidance Note on Defensive Tactics to remove repetition and place the content where it fits best.

Revisions to the Panel’s Guidance Note on Unlisted Code Companies

In summary, the principal updates:

• reflect the amended definition of Code company (which became effective on 30 March 2025), to remove references to “share parcels” – the intent was to simplify the approach to “counting” shareholders to determine whether a company was a “Code company”; and
• set out the Panel’s expectations regarding the publication of transaction documents for unlisted Code companies so that shareholders have access to relevant information during a transaction.