Section 63 — Companies Act 1993: Stock exchange acquisitions subject to prior notice to shareholders

63 Stock exchange acquisitions subject to prior notice to shareholders (1) The board of a company may make offers on on one or more stock exchanges to all shareholders to acquire shares only if it has previously resolved— (a) To acquire, by means of offers on on one or more stock exchanges to all shareholders, not more than a specified number of shares; and (b) That the acquisition is in the best interests of the company and its shareholders; and (c) That the terms of the offer and the consideration offered for the shares are fair and reasonable to the company and its shareholders; and (d) That it is not aware of any information that will not be disclosed to shareholders— (i) Which is material to an assessment of the value of the shares; and (ii) As a result of which the terms of the offer and consideration offered for the shares are unfair to shareholders accepting the offer. (2) The resolution must set out in full the reasons for the directors' conclusions. (3) The directors who vote in favour of a resolution required by subsection (1) of this section must sign a certificate as to the matters set out in that subsection and may combine it with the certificate required by section 52 of this Act. (3A) Offers may be made under subsection (1) of this section by any director or employee of the company who is authorised to do so by the resolution of the board under that subsection. (4) An offer must not be made under subsection (1) of this section if the number of shares to be acquired together with any shares already acquired would exceed the maximum number of shares the board has resolved to acquire under that subsection. (5) An offer must not be made under subsection (1) of this section if, after the passing of a resolution under that subsection and before the making of the offer to acquire the shares,— (a) The board ceases to be satisfied that the acquisition is in the best interests of the company and its shareholders; or (b) The board ceases to be satisfied that the terms of the offer and the consideration offered for the shares are fair and reasonable to the company and its shareholders; or (c) The board becomes aware of any information that will not be disclosed to shareholders— (i) Which is material to an assessment of the value of the shares; or (ii) As a result of which the terms of the offer and consideration offered for the shares would be unfair to shareholders accepting the offer. (6) Before an offer is made pursuant to a resolution under subsection (1) of this section, the company must send to each shareholder a disclosure document that complies with section 64 of this Act. (7) The offer must be made not less than 10 working days and not more than 12 months after the disclosure document has been sent to each shareholder. (8) A shareholder or the company may apply to the Court for an order restraining the proposed acquisition on the grounds that— (a) It is not in the best interests of the company or the shareholders; or (b) The terms of the offer and, if it is disclosed, the consideration offered for the shares are not fair and reasonable to the company or the shareholders. (9) Every director who fails to comply with subsection (3) of this section commits an offence and is liable on conviction to the penalty set out in section 373(1) of this Act. (10) If the board of a company fails to comply with subsection (5) of this section, every director of the company commits an offence and is liable on conviction to the penalty set out in section 374(1) of this Act. Subsection (1) was amended, as from 1 July 1994, by section 10(1) Companies Act 1993 Amendment Act 1994 (1994 No 6) by substituting the words “ on one or more stock exchanges ” for the words “ a stock exchange ” , in two places. It would appear that the word “ on ” which appears before the substituted words should also have been omitted by the amendment provision. Subsection (3A) was inserted, as from 1 July 1994, by section 10(2) Companies Act 1993 Amendment Act 1994 (1994 No 6). Subsections (4) and (5) were amended, as from 1 July 1994, by section 10(3) and (4) Companies Act 1993 Amendment Act 1994 (1994 No 6) by substituting the words “ An offer must not be made ” for the words “ A board must not make an offer ” .