Incentivising Shareholders To Accept Takeover Offers

Recent takeover activity has seen the use of various methods to incentivise shareholders to accept a takeover offer. This has included:

• the use of acceptance facilities, which allow shareholders to deliver an acceptance without actually accepting the bid, and

• varying the bid by public announcement, typically subject to receiving acceptances over a specified level or some other newly imposed conditions, but without formally varying the formal takeover offers.

While these techniques have been around for many years, their recent use has attracted some attention and questions have been raised about whether they are an appropriate feature in Australian takeovers practice.