Member-approved takeovers - ASIC acts

No, not schemes of arrangement, but approvals under item 7 of section 611 of the Corporations Act.

Item 7 allows a general meeting to approve an acquisition that would take the acquirer over the 20% ownership threshold.

It is not often used for full takeovers of companies, largely because that would require special relief from ASIC. However, following the Takeovers Panel 2002 decision in relation to Colonial Mutual Property Trust, it has provided a statutory alternative for certain takeovers of listed managed investment schemes (MISs – for which section 411 schemes of arrangement are unavailable).

ASIC has now released a draft new policy to reflect both the use of item 7 by MISs and changes in the regulatory environment since its original policy was published in 1994.