Companies Act, 1973 (Act No. 61 of 1973)

The Securities Regulation Code on Takeovers and Mergers

The Code

Section B. Definitions

1. Under Section 440A(1) of the Act
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Section 440A(1) of the Act includes the following definitions which apply unless the context otherwise indicates:

 

"acquisition", in relation to shares or other securities of any company, means the acquisition of shares or other securities in such company by any means whatsoever, including purchase or subscription;

 

"acting in concert" means, subject to subsection (2)(a) [of section 440A], acting in pursuance of an agreement, an arrangement or understanding (whether formal or informal) between two or more persons pursuant to which they or any of them co-operate for the purposes of entering into or proposing an affected transaction.

 

"affected transaction"

means any transaction including a transaction which forms part of a series of transactions or scheme, whatever form it may take, which -

a)taking into account any securities held before such transaction or scheme, has or will have the effect of-
i)vesting control of any company (excluding a close corporation) in any person, or two or more persons acting in concert, in whom control did not vest prior to such transaction or scheme; or
ii)any person, or two or more persons acting in concert, acquiring or becoming the sole holder or holders of, all the securities, or all the securities of a particular class, of any company (excluding a close corporation); or
b)involves the acquisition by any person, or two or more persons acting in concert, in whom control of any company (excluding a close corporation) vests on or after the date of commencement of section 1(c) of the Companies Second Amendment Act, 1990, of further securities of that company in excess of the limits prescribed in the rules;

 

"control"

means, subject to subsection (2)(b) [of section 440A], a holding or aggregate holdings of shares or other securities in a company entitling the holder thereof to exercise, or cause to be exercised, the specified percentage or more of the voting rights at meetings of that company, irrespective of whether such holding or holdings confers de facto control;

 

"offeree company"

means any company the securities or part of the securities of which are or are to be the subject of any affected transaction or proposed affected transaction;

 

"offeror"

means any person or two or more persons acting in concert who enter into or propose any affected transaction;

 

"security"

means any shares in the capital of a company and includes stock and debentures convertible into shares and any rights or interests in a company or in respect of any such shares, stock or debentures, and includes any "financial instrument" as defined in the Financial Markets Control Act, 1989 (Act No 55 of 1989);

 

"specified percentage" means the percentage, or different percentages in respect of different types of companies, prescribed in the Rules for the purposes of determining control as defined above.