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Companies Act, 2008 (Act No. 71 of 2008)

Chapter 5 : Fundamental Transactions, Takeovers and Offers

Part C : Regulation of affected transactions and offers

126. Restrictions on frustrating action

 

(1) If the board of a regulated company believes that a bona fide offer might be imminent, or has received such an offer, the board must not—
(a) take any action in relation to the affairs of the company that could effectively result in—
(i) a bona fide offer being frustrated; or
(ii) the holders of relevant securities being denied an opportunity to decide on its merits;
(b) issue any authorised but unissued securities;
(c) issue or grant options in respect of any unissued securities;
(d) authorise or issue, or permit the authorisation or issue of, any securities carrying rights of conversion into or subscription for other securities;
(e) sell, dispose of or acquire, or agree to sell, dispose of or acquire, assets of a material amount except in the ordinary course of business;
(f) enter into contracts otherwise than in the ordinary course of business; or
(g) make a distribution that is abnormal as to timing and amount, without the prior written approval of the Panel, and the approval of the holders of relevant securities, or in terms of a pre-existing obligation or agreement entered into before the time contemplated in this subsection.

 

(2) If a regulated company believes that it is subject to a pre-existing obligation contemplated in subsection (1), it may apply to the Panel for consent to proceed.