105. Takeover Offers

(1) In this Chapter:

Takeover Offer, in relation to a Company, means an offer to acquire all the Shares, or all the Shares of any class or classes, in the Company (other than Shares that at the date of the offer are already held by The Offeror), if the offer is on terms that are the same in relation to all the Shares to which the offer relates or, if those Shares include Shares of different classes, in relation to all the Shares of each relevant class.

(2) In subsection (1):

Shares means Shares that:

1. (a) have been allotted on the date of the offer; or
2. (b) are subsequently allotted before a date specified in or determined in accordance with the terms of the offer; or
3. (c) any rights convertible into Shares before a date specified or determined in accordance with the term of the offer.

(3) The terms offered in relation to any Shares are, for this section, to be treated as being the same in relation to all the Shares, or all the Shares of a class to which the offer relates, despite any variation permitted by subsection (4).

(4) A variation is permitted if:

1. (a) the law of a country or territory outside the AIFC precludes the acceptance of an offer in that jurisdiction in the form or the forms specified, or precludes it except after compliance by The Offeror with conditions with which it is unable to comply or that it regards as unduly onerous; and
2. (b) the variation is such that the Persons by whom the acceptance of an offer in that form is precluded are able to accept an offer in a different form but of substantially equivalent value.

(5) The reference in subsection (1) to Shares already held by The Offeror includes a reference to Shares that The Offeror has an unconditional right to acquire under an unconditional option to acquire.

(6) If the terms of an offer make provision for their revision and for an acceptance on the previous terms to be treated as an acceptance on the revised terms, the revision must not be regarded for this Chapter as the making of a fresh offer and a reference in this Chapter to the date of the offer is made is accordingly to be taken to be a reference to the date the original offer was made.

(7) In this Chapter:

The Company means the Company whose Shares are the subject of the Takeover Offer.

The Offeror means, subject to section 111 (Joint offers), the Person making the Takeover Offer.

106. Right of The Offeror to buy out minority Shareholders

(1) If, for a Takeover Offer that does not relate to Shares of different classes, The Offeror has, because of acceptances of the offer, acquired or contracted to acquire not less than9/10 in value of the Shares to which the offer relates, The Offeror may, within 120 days after the day the Takeover Offer closes, give notice to the holder of any Shares to which the offer relates that The Offeror has not acquired, or contracted to acquire, that The Offeror desires to acquire those Shares.

(2) If, for a Takeover Offer relates to Shares of different classes, The Offeror has, because of acceptances of the offer, acquired or contracted to acquire not less than 9/10 in value of the Shares of any class to which the offer relates, The Offeror may, within 120 days after the day the Takeover Offer closes, give notice to the holder of any Shares of that class that The Offeror has not acquired, or contracted to acquire, that The Offeror desires to acquire those Shares.

(3) The Offeror must not give a notice under subsection (1) or (2) unless The Offeror has acquired, or contracted to acquire, the Shares necessary to satisfy the minimum specified in the subsection within 4 months after the date of the offer, and must not give the notice more than 2 months after the day The Offeror acquires, or contracts to acquire, the shares necessary to satisfy that minimum.

(4) When The Offeror gives the first notice in relation to an offer, The Offeror must send a copy of it to The Company together with a signed declaration by The Offeror stating that the conditions for giving the notice are satisfied. The Offeror must not make the declaration unless The Offeror has reasonable grounds for believing it to be true.

(5) If The Offeror is a Body Corporate, the declaration must be signed by a Director of the Body Corporate for The Offeror. The Director must not make the declaration unless the Director has reasonable grounds for believing it to be true.

(6) Contravention subsection (4) or (5) is punishable by a fine.

(7) In a proceeding against a Person for a Failure to send a copy of a notice as required by subsection (4), it is a defence for the Person to prove that the Person took reasonable steps to ensure that the subsection was complied with.

(8) Subsection (9) applies if, during the period within which a Takeover Offer can be accepted, The Offeror acquires, or contracts to acquire, any of the Shares to which the offer relates otherwise than because of acceptances of the offer.

(9) If this subsection applies and either:

• (a) the value (the acquisition value) for which the Shares are acquired, or contracted to be acquired, does not, at that time, exceed the value that is receivable by an acceptor under the terms of the offer; or
• (b) those terms are subsequently revised so that, when the revision is announced, the acquisition value, at the time mentioned in paragraph (a) no longer exceeds the value that w is receivable by an acceptor under those terms;

The Offeror must be treated for this section as having acquired or contracted to acquire those Shares because of acceptances of the offer; but in any other case those Shares must be treated as excluded from those to which the offer relates.

107. Effect of notice under section 106

(1) Subject to section 110 (Applications to Court), the following provisions have effect if a notice is given in respect of any Shares under section 106 (Right of The Offeror to buy out minority Shareholders).

(2) The Offeror is entitled and bound to acquire the Shares on the terms of the offer.

(3) If the terms of the offer give the holder of any Shares a choice of payment for the Shares, the notice must give particulars of the choice and state:

• (a) that the holder of the Shares may, within 6 weeks after the date of the notice, indicate the holder’s choice by a Written communication sent to The Offeror at an address specified in the notice; and
• (b) which payment specified in the offer is to be taken as applying if holder indicate the holder’s choice; and the terms of the offer mentioned in subsection (2) have effect accordingly.

(4) Subsection (3) applies whether or not any time limit or other conditions applying to the choice under the terms of the offer can still be met. If the payment chosen by the holder of the Shares:

• (a) is not cash and The Offeror is no longer able to make that payment; or
• (b) was to have been made by a third party who is no longer bound or able to make the payment; the payment must be taken to consist of an amount of cash payable by The Offeror that, at the date of the notice, is equivalent to the chosen payment.

(5) At the end of 6 weeks after the date of the notice, The Offeror must immediately:

• (a) send a copy of the notice to The Company; and
• (b) make payment to The Company on behalf of the holders of the Shares to which the notice relates.

(6) The copy of the notice sent to The Company under subsection (5)(a) must be accompanied by an instrument of transfer executed on behalf of the Shareholder by a Person appointed by The Offeror. On receipt of that instrument, The Company must register The Offeror as the holder of those Shares.

(7) If the payment referred to in subsection (5)(b) is to be made in Securities to be issued by The Offeror, the reference in that section to making payment is a reference to the issue of the Securities to The Company on behalf of the holders of the Shares to which the notice relates.

(8) Any amount or other payment received by The Company under subsection (5)(b) is not the property of The Company but must be held by The Company on behalf of the Person entitled to the Shares in respect of which the amount or other payment was received.

(9) Any amount received, including any dividend or other amount accruing from any other payment, by The Company under subsection (5)(b) must be paid into a separate bank account, the balance of which bears interest at an appropriate rate and can be withdrawn by the notice (if any) that is appropriate.

108. Right of minority Shareholder to be bought out by The Offeror

(1) If, for a Takeover Offer does not relate to Shares of different classes, at any time before the end of the period within which the offer can be accepted:

• (a) The Offeror has, because of acceptances of the offer, acquired or contracted to acquire some (but not all) of the Shares to which the offer relates; and
• (b) those Shares, with or without any other Shares in the Company that The Offeror has acquired, or contracted to acquire, amount to not less than 9/10 in value of all the Shares in the Company;

the holder of any Shares to which the offer relates who has not accepted the offer may, by a Written communication addressed to The Offeror, require The Offeror to acquire the Shares.

(2) If, subsection (1) does not apply to a Takeover Offer and, at any time before the end of the period within which the offer can be accepted:

• (a) The Offeror has, because of acceptances of the offer, acquired or contracted to acquire some (but not all) of the Shares of any class to which the offer relates; and
• (b) those Shares, with or without any other Shares of that class that The Offeror has acquired, or contracted to acquire, amount to not less than 9/10 in value of all the Shares of that class;

the holder of any Shares of that class who has not accepted the offer may, by a Written communication addressed to The Offeror, require The Offeror to acquire the Shares.

(3) No later than 1 month after the end of the period within which the offer can be accepted The Offeror must give any Shareholder or holder of Shares of that class who has not accepted the offer a notice setting out:

• (a) the rights that are exercisable by the Shareholder or holder of Shares of that class under subsection (1) or (2); and
• (b) the period within which the rights are exercisable; and, if the notice is given before the end of the period within which the offer can be accepted, the notice must state that the offer is still open for acceptance.

(4) The notice under subsection (3) may specify a period (not less than 3 months after the end of the period within which the offer can be accepted) for the exercise of the rights given by this section. If the notices specify such a period, the rights may not be exercised after the end of that period.

(5) Subsection (3) does not apply to any Shares if The Offeror has given the Shareholder notice in respect of the Shares under section 106 (Right of The Offeror to buy out minority Shareholders).

(6) Contravention of subsection (3) is punishable by a fine.

(7) If The Offeror is not a Company, then, in a proceeding against The Offeror for an alleged Failure to comply this section, it is a defence for The Offeror to prove that The Offeror took all reasonable steps to ensure that this section was complied with.

109. Effect of requirement under section 108

(1) Subject to section 110 (Applications to Court), the following provisions have effect if a Shareholder exercises the Shareholder’s rights in respect of any Shares under section 108 (Right of minority Shareholder to be bought out by The Offeror).

(2) The Offeror is entitled and bound to acquire the Shares on the terms of the offer or, if other terms are agreed, on the other terms.

(3) If the terms of the offer give the holder of the Shares a choice of payment for the Shares, the holder of the Shares may, in accordance with section 107(3) (Effect of notice under section 106), indicate the holder’s choice when requiring The Offeror to acquire them.

(4) Subsection (3) applies whether or not any time limit or other conditions apply to the choice under the terms of the offer can still be met. If the payment chosen by the holder of the Shares:

• (a) is not cash and The Offeror is no longer able to make that payment; or
• (b) was to have been made by a third party who is no longer bound or able to make that payment; the payment must be taken to consist of an amount of cash payable by The Offeror that, on the day the holder of the Shares required The Offeror to acquire them, is equivalent to the chosen payment.

110. Applications to Court

(1) If a notice is given under subsection 106 (Right of The Offeror to buy out minority Shareholders) to the holder of any Shares, the Court may, on an application made by the holder within 6 weeks after the day the notice was given:

• (a) order that The Offeror is not be entitled and bound to acquire the Shares; or
• (b) specify terms of acquisition different from those of the offer.

(2) If an application to the Court under subsection (1) is pending at the end of the period mentioned in section 107(5) (Effect of notice under section 106), then, unless otherwise ordered by the Court, that section does not have effect until the application has been disposed of.

(3) If the holder of any Shares exercises the holder’s rights under section 108 (Right of minority Shareholder to be brought out by The Offeror), the Court may, on an application made by the holder or The Offeror, order that the terms on which The Offeror is entitled and bound to acquire the Shares are the terms that the Court considers appropriate.

(4) On an application made under subsection (1) or (3) the Court may not require consideration that is:

• (a) a higher value than the value (the offer value) specified in the notice containing the terms of the offer to be paid for the Shares to which the application relates, unless the holder of the Shares shows that the offer value would be unfair; or
• (b) a lower value than the offer value.

(5) No order for costs may be made against a Shareholder making an application under subsection (1) or (3), unless the Court considers:

• (a) that the application was unnecessary, improper or vexatious; or
• (b) that there has been unreasonable conduct by the Shareholder during the proceedings on the application.

(6) If a Takeover Offer has not been accepted to the extent necessary to entitle The Offeror to give notices under section 106(1) or (2), the Court may, on the application of The Offeror, make an order authorising The Offeror to give notices under section 106 (1)or (2) if satisfied:

• (a) that The Offeror has, after reasonable enquiry, been unable to trace 1 or more of the Persons holding Shares to which the offer relates; and
• (b) that the Shares that The Offeror has acquired, or contracted to acquire, because of acceptances of the offer, together with the Shares held by the Person or Persons mentioned in paragraph (a), total not less than the minimum applying under section 106(1)or (2) and
• (c) that the terms offered are fair and reasonable.

(7) However, the Court may not make an order under subsection (6) unless it considers that it is just and equitable to make the order having regard, in particular, to the number of Shareholders who have been traced but have not accepted the offer.

111. Joint offers

(1) A Takeover Offer may be made by 2 or more Persons jointly, and in that event, this Chapter has effect with the following modifications.

(2) The conditions for the exercise of the rights given by sections 106 (Right of The Offeror to buy out minority Shareholders) and 108 (Right of minority Shareholder to be brought out by The Offeror) are satisfied by the joint offerors acquiring, or contracting to acquire, the necessary Shares jointly (as respects acquisitions because of acceptances of the offer) and either jointly or separately (in other cases) and, subject to the following provisions, the rights and obligations of The Offeror under those sections and sections 107 (Effect of notice under section 106) and 109 (Effect of requirement under section 108) are respectively joint rights and joint and several obligations of the joint offerors.

(3) It is sufficient compliance with any provision of those sections requiring or authorising a notice or other Document to be given or sent by or to the joint offerors that it is given or sent by or to any of them, except that the declaration required by section 106(4) must be made by all of them and, for a joint offeror that is a Body Corporate, signed by a Director of the Body Corporate.

(4) In sections 105, 107(7) and 112, a reference to The Offeror is a reference to the joint offerors or any of them.

(5) In section 107(4)(a), the reference to The Offeror being no longer able to make the payment is a as reference to none of the joint offerors being able to do so.

(6) In section 107(6), a reference to The Offeror is a reference to the joint offerors or such of them as they may determine.

(7) In section 110, a reference to The Offeror is a reference to the joint offerors, except that any application under section 110(3) or (6) may be made by any of them. However, the reference in section 110(6)(a) to The Offeror having been unable to trace 1 or more of the Persons holding Shares is a reference to none of the joint offerors having been able to do so.

112. Associates

(1) The requirement in section 105(1) (Takeover Offers) that a Takeover Offer must extend to all the Shares, or all the Shares of any class or classes, in a Company may be satisfied even though the offer does not extend to Shares that associates of The Offeror hold or have contracted to acquire. Shares that an associate holds or has contracted to acquire, whether at the time when the offer is made or subsequently, must be disregarded for the purposes of any reference in this Chapter to the Shares to which a Takeover Offer relates.

(2) If, during the period within which a Takeover Offer can be accepted, any associate of The Offeror acquires, or contracts to acquire, any of the Shares to which the offer relates, then, if the condition specified in section 106(9)(a) or (b) (Right of The Offeror to buy out minority Shareholders) is satisfied in respect of those Shares, the Shares must be treated for section 106 as Shares to which the offer relates.

(3) In section 108(1)(b) and (2)(b) (Right of minority Shareholder to be bought out by The Offeror), the reference to Shares that The Offeror has acquired or contracted to acquire includes a reference to Shares that any associate of The Offeror has acquired or contracted to acquire.

(4) In this section: associate, in relation to The Offeror, means any of the following:

1. (a) a nominee of The Offeror;
2. (b) a Holding Company, Subsidiary or fellow Subsidiary of The Offeror or a nominee of such a Holding Company, Subsidiary or fellow Subsidiary;
3. (c) a Body Corporate in which The Offeror has a substantial interest.

(5) For subsection (4), a Company is a fellow Subsidiary of another Body Corporate if both are Subsidiaries of the same Body Corporate, but neither is a Subsidiary of the other.

(6) For subsection (4), The Offeror has a substantial interest in a Body Corporate if:

1. (a) the Body Corporate or its Directors are accustomed to act in accordance with The Offeror’s directions or instructions; or
2. (b) The Offeror is entitled to exercise or control the exercise of 1/2 or more of the voting power at General Meetings of the Body Corporate; or
3. (c) The Offeror owns or controls directly or indirectly more than 20% of the share capital of the Body Corporate.

(7) If The Offeror is an individual, The Offeror’s associates also include The Offeror’s spouse and any child, stepchild or grandchild of The Offeror.