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

Chapter 5 : Fundamental Transactions, Takeovers and Offers

Part B : Authority of Panel and Takeover Regulations

119. Panel regulation of affected transactions

 

 

1) The Panel must regulate any affected transaction or offer in accordance with this Part, Part C and the Takeover Regulations, but without regard to the commercial advantages or disadvantages of any transaction or proposed transaction, in order to—
a) ensure the integrity of the marketplace and fairness to the holders of the securities of regulated companies;
b) ensure the provision of—
i) necessary information to holders of securities of regulated companies, to the extent required to facilitate the making of fair and informed decisions; and
ii) adequate time for regulated companies and holders of their securities to obtain and provide advice with respect to offers; and
c) prevent actions by a regulated company designed to impede, frustrate, or defeat an offer, or the making of fair and informed decisions by the holders of that company’s securities.

 

2) Subject to subsection (6), the Panel must regulate any affected transaction or offer, and the conduct of the parties in respect of any such transaction or offer, in a manner that promotes the objects set out in subsection (1) and, without limiting the generality of that subsection, ensures—
a) that no person may enter into an affected transaction unless that person is ready, able and willing to implement that transaction;
b) that all holders of—
i) any particular class of voting securities of an offeree regulated company are afforded equivalent treatment; and
ii) voting securities of an offeree regulated company are afforded equitable treatment, having regard to the circumstances;
c) that no relevant information is withheld from the holders of relevant securities; and
d) that all holders of relevant securities—
i) receive the same information from an offeror, potential offeror, or offeree regulated company during the course of an affected transaction, or when an affected transaction is contemplated; and
ii) are provided sufficient information, and permitted sufficient time, to enable them to reach a properly informed decision.

 

3) Subsection (2)(d) is not to be construed or applied to prohibit—
a) the furnishing of information in confidence by an offeree company to a bona fide potential offeror or vice versa; or
b) the issue of circulars by brokers or advisers to any party to the transaction to their own investment clients,

with the prior approval of the Panel.

 

4) In carrying out its mandate, the Panel may—
a) require the filing, for approval or otherwise, of any document with respect to an affected transaction or offer, if the document is required to be prepared in terms of this Part, Part C and the Takeover Regulations;
b) issue compliance certificates, if the Panel is satisfied that the offer or transaction satisfies the requirements of this Part, Part C and the Takeover Regulations; and
c) initiate or receive complaints, conduct investigations, and issue compliance notices, with respect to any affected transaction or offer, in accordance with Chapter 7, and the Takeover Regulations.

 

5) To the extent necessary to ensure compliance with this Part, Part C and the Takeover Regulations, and to fulfil the purposes contemplated in subsection (1), a compliance notice contemplated in subsection (4)(c) may, among other things—
a) prohibit or require any action by a person; or
b) order a person to—
i) divest of an acquired asset; or
ii) account for profits.

 

6) The Panel may wholly or partially, and with or without conditions, exempt an offeror to an affected transaction or an offer from the application of any provision of this Part, Part C or the Takeover Regulations if—
a) there is no reasonable potential of the affected transaction prejudicing the interests of any existing holder of a regulated company’s securities;
b) the cost of compliance is disproportionate relative to the value of the affected transaction; or
c) doing so is otherwise reasonable and justifiable in the circumstances having regard to the principles and purposes of this Part, Part C and the Takeover Regulations.