• PARAGRAPH 38 PARAGRAPH 38

    Definitions and interpretation for this Paragraph

    Court sanction hearing

    The hearing of the court to sanction a scheme of arrangement.

    Effective date

    Effective date means:

    (a) the date on which the order of the court sanctioning the scheme is delivered to the registrar of companies for registration; or
    (b) if later, the date on which the order of the court confirming any associated reduction of capital and statement of capital are delivered to the registrar of companies for registration or, if the court so orders, the date on which they are registered.

    Long-stop date

    The date stated in the scheme circular to be the latest date by which the scheme must become effective and included as such in the terms of the scheme.

    Offer documents and Target board circulars

    In the case of a scheme of arrangement, references in the Takeover Rules to an offer document or to the Target board circular (and related expressions) shall be construed as references to the scheme circular and references to a revised offer document or to a subsequent Target board circular (and related expressions) shall be construed as references to any supplementary scheme circular.

    Shareholder meetings

    The meeting of shareholders of the Target (or meetings of relevant classes of shareholders) convened by the court to consider a resolution to approve a scheme of arrangement and any general meeting of the Target (and related class meetings) convened to consider any resolution to approve or give effect to a scheme.

    • 38.1 APPLICATION OF THE CODE TO SCHEMES OF ARRANGEMENT

      The provisions of the Takeover Rules apply to an offer effected by means of a scheme of arrangement in the same way as they apply to an offer effected by means of a contractual offer, except as set out in this Paragraph.

    • 38.2 MANDATORY OFFERS

      An obligation to make a mandatory offer under Paragraph 9 may not be satisfied by way of a scheme of arrangement except with the prior consent of the Panel.

    • 38.3 EXPECTED SCHEME TIMETABLE

      (a) Where a Bidder announces a firm intention to make an offer which is to be implemented by means of a scheme of arrangement and the board of the Target agrees to the inclusion of a statement of its intention to recommend the scheme in that announcement, then the Target company must, except with the consent of the Panel, ensure that the scheme circular is sent to shareholders and persons with information rights within 28 days of that announcement. If the Target board subsequently withdraws its recommendation, this obligation will cease.
      (b) The parties to the offer are permitted to include within the conditions to the scheme:
      (i) a long-stop date by which the scheme must become effective (unless extended with the agreement of the parties to the offer);
      App 7.3
      (ii) a specific date by which the shareholder meetings must be held (unless extended with the agreement of the parties to the offer), provided that the date specified must be more than 21 days after the expected date of the shareholder meetings to be set out in the scheme circular; and
      (iii) a specific date by which the court sanction hearing must be held (unless extended with the agreement of the parties to the offer) provided that the date specified must be more than 21 days after the expected date of the court sanction hearing to be set out in the scheme circular.
      (c) Any condition referred to in paragraph (b) above:
      (i) must be given prominent reference in the Bidder's announcement of a firm intention to make an offer;
      (ii) must not be capable of being invoked or waived after the date specified unless extended with the agreement of the parties to the offer; and
      (iii) will not be subject to Paragraph 12.5(a).
      (d) The Target must ensure that the scheme circular sets out the expected timetable for the scheme, including the expected dates and times for the following:
      (i) the record date for any shareholder meeting;
      (ii) the latest date and time for the lodging of forms of proxy or elections for any alternative form of consideration;
      (iii) the date and time of any shareholder meetings, which must normally be convened for a date which is at least 21 days after the date of the scheme circular;
      (iv) the date and time of any meetings of the shareholders of the Bidder to be convened in connection with the offer;
      (v) the date of the court sanction hearing;
      (vi) the record date for the purposes of the scheme and/or any reduction of capital provided for by the scheme;
      (vii) the date and time of any proposed suspension in trading of shares or other securities of the Target;
      (viii) the date of any court hearing to confirm any reduction of capital provided for by the scheme;
      (ix) the effective date;
      (x) the date and time of the admission to trading of any Bidder securities to be issued in connection with the scheme; and
      (xi) the long-stop date.
      (e) Upon publication of the scheme circular, the Target must announce in accordance with Paragraph 2.9 that the scheme circular has been published and include in that announcement the expected timetable, including the expected dates and times referred to in paragraph (d) above.
      (f) The Target company must implement the scheme in accordance with the expected timetable, as published (subject to any change to the expected timetable announced in accordance with Section 6 below), unless:
      (i) the board of the Target withdraws its recommendation of the scheme;
      (ii) the board of the Target announces its decision to propose an adjournment of a shareholder meeting or the court sanction hearing;
      (iii) a shareholder meeting or the court sanction hearing is adjourned; or
      (iv) any condition to the scheme is invoked by the Bidder in accordance with the Takeover Rules.

    • 38.4 HOLDING STATEMENTS

      (a) When a Bidder has announced a firm intention to make an offer to be implemented by means of a scheme of arrangement and it has been announced that a potential competing Bidder might make an offer (see Paragraphs 2.6(d) and (e)), the Panel will normally require the potential Bidder to clarify its position by no later than 5.00 pm on the seventh day prior to the date of the shareholder meetings.
      (b) Where appropriate, however, taking into account all relevant factors, including:
      (i) the interests of Target shareholders and the desirability of clarification prior to the shareholder meetings; and
      (ii) the time which the potential Bidder has had to consider its position,
      the Panel may permit the potential Bidder to clarify its position after the date of the shareholder meetings but before the date of the court sanction hearing.
      (c) The Panel will announce the deadline by which clarification is required under paragraph (a) or (b) above.

    • 38.5 ANNOUNCEMENTS FOLLOWING KEY EVENTS IN A SCHEME

      (a) If the parties to the offer include any condition to the scheme in accordance with Paragraph 38.3(b) above and any such condition is not capable of being satisfied by the date specified in that condition, the Bidder must make an announcement as soon as practicable and, in any event, by no later than 8.00 am on the business day following the date so specified, stating whether the Bidder has invoked that condition, waived that condition or, with the agreement of the Target, specified a new date by which that condition must be satisfied.
      (b) As soon as practicable after the votes on the relevant resolutions at the shareholder meetings and, in any event, by no later than 8.00 am on the business day following the shareholder meetings, the Target must make an announcement stating whether or not the resolutions were passed by the requisite majorities (and, if not, whether or not the scheme has lapsed) and giving details of the voting results in relation to the meetings, including:
      (i) in the case of any general meeting of the Target company convened to consider any resolution to approve or give effect to the scheme, if a poll was taken, the number of shares of each class which were voted for and against the resolutions and the percentage of the shares voted which those numbers represent; and
      (ii) in the case of each court-convened meeting:
      (A) the number of shareholders of the class who voted for and against the resolution to approve the scheme and the percentage of those voting shareholders which those numbers represent;
      (B) the number of shares of the class which were voted for and against the resolution to approve the scheme and the percentage of the total shares voted which those numbers represent; and
      (C) the percentage of the issued shares of the class which the shares voted for and against the resolutions represent.
      (c) As soon as practicable following the court sanction hearing, the Target must make an announcement stating the decision of the court and including details of whether the scheme will proceed or has lapsed.
      (d) As soon as practicable on the effective date, the Target or the Bidder must make an announcement stating that the scheme has become effective.

    • 38.6 CHANGES TO THE EXPECTED SCHEME TIMETABLE

      (a) Any adjournment of a shareholder meeting or court sanction hearing, or a decision by the Target board to propose such an adjournment, must be announced promptly by the Target in accordance with the requirements of Paragraph 2.9. If the meeting or hearing is adjourned to a specified date, the announcement should set out the relevant details. If the meeting or hearing is adjourned without at the same time specifying a date for the adjourned meeting, a further announcement should be made in accordance with the requirements of Paragraph 2.9 once the new date has been set.
      (b) Similarly, except with the consent of the Panel, any other change to the expected timetable of events set out in the scheme circular must be announced promptly by the Bidder or Target (as appropriate) in accordance with the requirements of Paragraph 2.9.
      (c) In all cases, the Panel should be consulted as to whether notice of an adjournment of any meeting or hearing or any other delay in, or change to, the expected timetable should, in addition, be sent to Target shareholders and persons with information rights.

    • 38.7 REVISION

      (a) Any revision to a scheme of arrangement should normally be made by no later than the date which is 14 days prior to the date of the shareholder meetings (or any later date to which such meetings are adjourned). The consent of the Panel must be obtained if it is proposed to make any revision to a scheme either:
      (i)
      (a) less than 14 days prior to the date of the shareholder meetings (or any later date to which such meetings are adjourned); or
      (ii)
      (b) following the shareholder meetings.

    • 38.8 SWITCHING

      (a) With the consent of the Panel, the Bidder may switch from a scheme of arrangement to a contractual offer or from a contractual offer to a scheme of arrangement, whether or not the Bidder has reserved the right to change the structure of the offer.
      (b) The Panel will determine the offer timetable that will apply following any switch to which it consents.
      (c) The Bidder must announce a switch in accordance with the requirements of Paragraph 2.9. The announcement must include:
      (i) details of all changes to the terms and conditions of the offer as a result of the switch;
      (ii) details of any material changes to the other details originally announced pursuant to Paragraph 2.7(c);
      (iii) an explanation of the offer timetable applicable following the switch (as determined by the Panel); and
      (iv) an explanation of whether or not any irrevocable commitments or letters of intent procured by the Bidder or any person acting in concert with it will remain valid following the switch.

    • 38.9 ALTERNATIVE CONSIDERATION

      (a) If a scheme of arrangement permits shareholders to elect to receive any alternative form of consideration, or to elect, subject to the election of others, to vary the proportions in which they receive different forms of consideration, the ability of shareholders to make such elections must not be closed off or withdrawn before the shareholder meetings.
      (b) A shareholder who has elected to receive a particular form of consideration in respect of any of his shares must be entitled to withdraw his election. However, this right may be shut off not earlier than one week prior to the date on which the court sanction hearing is originally proposed to be held or, if for any reason the court sanction hearing is rearranged for a later date, not earlier than one week prior to that later date.

    • 38.10 SETTLEMENT OF CONSIDERATION

      Except with the consent of the Panel, the consideration must be sent to Target shareholders within 14 days of the effective date. The terms of the scheme must reflect this requirement.

    • 38.11 RETURN OF DOCUMENTS OF TITLE

      If an offer being implemented by way of a scheme lapses or is withdrawn, or if a shareholder withdraws his election for a particular form of consideration, all documents of title and other documents lodged with any form of election must be returned as soon as practicable (and in any event within 14 days of such lapsing or withdrawal) and the receiving agent should immediately give instructions for the release of securities held in escrow.

    • 38.12 VOTING BY CONNECTED EXEMPT PRINCIPAL TRADERS

      Except with the consent of the Panel, securities owned by an exempt principal trader connected with a Bidder or the Target must not be voted on a resolution put to shareholders in the Target to approve or to give effect to a scheme of arrangement. The Panel will normally grant its consent in the following circumstances:

      (a) an exempt principal trader connected with a Bidder whose offer is being implemented by way of a scheme will normally be permitted to vote against the scheme but will not normally be permitted to vote in favour of it;
      (b) an exempt principal trader connected with a competing Bidder (or potential Bidder) will normally be permitted to vote in favour of such a scheme but will not normally be permitted to vote against it; and
      (c) an exempt principal trader connected with the Target will normally be permitted to vote in favour of or against the scheme.

    • 38.13 SCHEMES WHICH DO NOT HAVE THE SUPPORT OF THE TARGET BOARD

      The Panel should be consulted if a Bidder is considering announcing an offer or possible offer which it is proposed will be implemented by means of a scheme of arrangement without, prior to such announcement, obtaining the support of the Target board.

    • 38.14 INCORPORATION OF OBLIGATIONS AND RIGHTS

      In addition to the relevant requirements of Paragraphs 23 and 24, the scheme circular must incorporate language which appropriately reflects those parts of Paragraph 12.5(a) and 12.6 (if applicable) and of this Paragraph 38 which impose timing obligations or confer rights or impose restrictions on Bidders, Target companies or shareholders of Target companies.

    • 38.15 ADMISSION TO LISTING AND ADMISSION TO TRADING CONDITIONS

      Where securities are offered as consideration and it is intended that they should be admitted to listing on the Official List and/or to trading on a recognised investment exchange, the relevant admission to listing and/or trading condition should, except with the consent of the Panel, be in terms which ensure that it is capable of being satisfied only when all steps required for the admission to listing or trading have been completed other than the Financial Services Regulator and/or the relevant recognised investment exchange, as applicable, having announced their respective decisions to admit the securities to listing or trading. Where securities are offered as consideration and it is intended that they should be admitted to listing or to trading on any other investment exchange or market, the Panel should be consulted.

    • 38.16 PROVISIONS DISAPPLIED IN A SCHEME

      The following provisions of the Takeover Rules do not apply to a scheme of arrangement:

      (a) Paragraph 4.5 (restriction on the Target accepting an offer in respect of treasury shares);
      (b) Paragraph 10 (the acceptance condition);
      (c) Paragraphs 16.1 and 16.2 (announcement of acceptance levels);
      (d) Paragraph 17 (the use of proxies and other authorities in relation to acceptances);
      (e) Paragraph 22.7 (incorporation of obligations and rights) and Paragraph 23.14 (cash underwritten alternatives which may be shut off);
      (f) Paragraph 23.10 (admission to listing and admission to trading conditions);
      (g) Paragraphs 30.1 to 30.10 (timing of the offer);
      (i) Paragraphs 33.1 to 33.3 (alternative offers); and
      (j) Paragraph 34 (right of withdrawal).