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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

124. Compulsory acquisitions and squeeze out

 

 

(1) If, within four months after the date of an offer for the acquisition of any class of securities of a regulated company, that offer has been accepted by the holders of at least 90% of that class of securities, other than any such securities held before the offer by the offeror, a related or inter-related person, or persons acting in concert, or a nominee or subsidiary of any such person or persons—
(a) within two further months, the offeror may notify the holders of the remaining securities of the class, in the prescribed manner and form—
(i) that the offer has been accepted to that extent; and
(ii) that the offeror desires to acquire all remaining securities of that class; and
(b) subject to subsection (2), after giving notice in terms of paragraph (a), the offeror is entitled, and bound, to acquire the securities concerned on the same terms that applied to securities whose holders accepted the original offer.

 

(2) Within 30 business days after receiving a notice in terms of subsection (1)(a), a person may apply to a court for an order—
(a) that the offeror is not entitled to acquire the applicant’s securities of that class; or
(b) imposing conditions of acquisition different from those of the original offer.

 

(3) If an offer to acquire the securities of a particular class has not been accepted to the extent contemplated in subsection (1)—
(a) the offeror may apply to a court for an order authorising the offeror to give a notice contemplated in subsection (1)(a); and
(b) the court may make the order applied for, if—
(i) after making reasonable enquiries, the offeror has been unable to trace one or more of the persons holding securities to which the offer relates;
(ii) by virtue of acceptances of the original offer, the securities that are the subject of the application, together with the securities held by the person or persons referred to in subparagraph (i), amount to not less than the minimum specified in subsection (1);
(iii) the consideration offered is fair and reasonable; and
(iv) the court is satisfied that it is just and equitable to make the order, having regard, in particular, to the number of holders of securities who have been traced but who have not accepted the offer.

 

(4) If an offer for the acquisition of any class of securities of a regulated company has resulted in the acquisition by the offeror or a nominee or subsidiary of the offeror, or a related or inter-related person of any of them, individually or in aggregate, of sufficient securities of that class such that, together with any other securities of that class already held by that person, or those persons in aggregate, they then hold at least 90% of the securities of that class—
(a) the offeror must notify the holders of the remaining securities of the class that the offer has been accepted to that extent;
(b) within three months after receiving a notice in terms of paragraph (a), a person may demand that the offeror acquire all of the person’s securities of the class concerned; and
(c) after receiving a demand in terms of paragraph (b), the offeror is entitled, and bound, to acquire the securities concerned on the same terms that applied to securities whose holders accepted the original offer.

 

(5) If an offeror has given notice in terms of subsection (1), and no order has been made in terms of subsection (3), or if the offeror has received a demand in terms of subsection (4)(b)—
(a) six weeks after the date on which the notice was given or, if an application to a court is then pending, after the application has been disposed of, or after the date on which the demand was received, as the case may be, the offeror must—
(i) transmit a copy of the notice to the regulated company whose securities are the subject of the offer, together with an instrument of transfer, executed on behalf of the holder of the those securities by any person appointed by the offeror; and
(ii) pay or transfer to that company the consideration representing the price payable by the offeror for the securities concerned,
(b) subject to the payment of prescribed fees or duties, the company must thereupon register the offeror as the holder of those securities.

 

(6) An instrument of transfer contemplated in subsection (5) is not required for any securities for which a share warrant is for the time being outstanding.

 

(7) A regulated company must deposit any consideration received under this section into a separate interest bearing bank account with a banking institution registered under the Banks Act and, subject to subsection (8), those deposits must be—
(a) held in trust by the company for the person entitled to the securities in respect of which the consideration was received; and
(b) paid on demand to the person contemplated in paragraph (a), with interest to the date of payment.

 

(8) If a person contemplated in subsection (7)(a) fails for more than three years to demand payment of an amount held in terms of that paragraph, the amount, together with any accumulated interest, must be paid to the benefit of the Guardian’s Fund of the Master of the High Court, to be held and dealt with in accordance with the rules of that Fund.

 

(9) In this section any reference to a "holder of securities who has not accepted the offer" includes any holder who has failed or refused to transfer their securities to the offeror in accordance with the offer.