SGS 9 (Scheme of Arrangement) Flashcards
Which shares count towards the squeeze out procedure 90% threshold?
Before Day 0 - shares in relation to which offeror entered into an irrevocable undertaking with the shareholder.
Shares offeror buys after Day 0, provided they are bought on the same terms as the offer.
Describe the effect of Rule 10 on a contractual offer?
Offeror reserves the right to waive down a 90% acceptance condition to a 50% + 1.
What happens if the 90% acceptance condition is not reached for a contractual offer?
The offeror can let the offer lapse (avoid minority shareholders) OR can waive it down (Rule 10).
Why is stake building often of little value to scheme of arrangements?
offeror cannot vote resolution to approve the scheme is the offeror already owns shares in the targets.
Is stakebuilding beneficial to contractual offers?
Counts towards the 50% + 1 threshold contained in Rule 10.
Shares already owned by the offeror before offer document posted cannot count towards 90% threshold for the squeeze out procedure.
Hostile bids and schemes of arrangements?
Difficult, as usually Target board’s cooperation is required to convene meetings.
Why is it difficult to revise a scheme of arrangement in the context of a competitive bid?
Para 7 Appendix 7 - need to revise no later than 14 days before shareholder meetings, go back to court to approve new documentation or order new court meeting.
Flexibility of scheme of arrangement?
para 8 appendix 7, with consent of panel, and announcement under Rule 30.1.
Revision of competitive bids for a contractual offer?
Can revise at any time (just need to keep open for 14 days - 32.1(c)).
Other actions in Rule 32.1(a).
What are the thresholds for a scheme of arrangement?
majority un bomber
75% in value of target’s shareholders PRESENT and VOTING.
Describe the compulsory acquisition procedure.
Under s.979(2) CA ‘06 offeror must have acquired 90%v in value of the shares to which the offer relates and not less than 90% of the voting rights carried by those shares.
This excludes shares owned by the Bidder at the date of the offer s.974(2) CA ‘06.
