Corporations Act 2001

CHAPTER 6 - TAKEOVERS  

Note: This Chapter only applies to acquisitions of interests in a CCIV if the CCIV is a listed company: see Division 1 of Part 8B.7 .

PART 6.4 - FORMULATING THE TAKEOVER OFFER  

Division 2 - Consideration for the offer  

SECTION 622   ESCALATION AGREEMENTS  

Benefits linked to bids and proposed bids not allowed

622(1)    
A person who makes or proposes to make a takeover bid for securities, or their associate, contravenes this section if:

(a)    a person acquires a relevant interest in securities in the bid class within the 6 months before the bid is made or proposed; and

(b)    at any time whatever, the bidder, proposed bidder or associate gives or agrees to give a benefit to, or receives or agrees to receive a benefit from:

(i) a person who had a relevant interest in any of the paragraph (a) securities immediately before the acquisition; or

(ii) an associate of a person who had a relevant interest in any of those securities at that time; and

(c)    the benefit is attributable to the acquisition or matters that include the acquisition; and

(d)    the amount or value of the benefit is, or is to be, determined by reference to or to matters that include either of the following:

(i) the amount or value of the consideration for the securities under the bid or proposed bid;

(ii) the amount or value of the consideration for which the bidder or proposed bidder acquires, offers or proposes to offer to acquire, securities in the bid class during the offer period (whether or not under the bid) or under Chapter 6A .

Strict liability offences

622(1A)    

An offence based on subsection (1) is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code .

Contravening agreements void

622(2)    
An agreement is void to the extent that it purports to provide for:

(a)    a person to give a benefit to a person; or

(b)    a person to receive a benefit from a person;

in contravention of subsection (1).