Section 640 — Corporations Act 2001 (Cth)

(1) If:

(a) the bidder’s voting power in the target is 30% or more; or

(b) for a bidder who is, or includes, an individual—the bidder is a director of the target; or

(c) for a bidder who is, or includes, a body corporate—a director of the bidder is a director of the target;

a target’s statement given in accordance with section 638 must include, or be accompanied by, a report by an expert that states whether, in the expert’s opinion, the takeover offers are fair and reasonable and gives the reasons for forming that opinion.

Note: Subsections 648A(2) and (3) provide for the independence of the expert and disclosure of any association between the target and the expert or the bidder and the expert. A contravention of one of those subsections results in the target’s statement not complying with this subsection.

(2) In determining whether the bidder’s voting power in the target is 30% or more, calculate the bidder’s voting power at the time the bidder’s statement is sent to the target.

(3) An offence based on subsection (1) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

Related sections

• s 637 — Bidder’s statement formalities
• s 638 — Target’s statement content
• s 639 — Target’s statement formalities
• s 641 — Target must inform bidder about securities holdings
• s 641A — Use or disclosure of information obtained from target
• s 642 — Expenses of directors of target companies

Research how courts apply s 640

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