TAKE-OVER BID:
If Company A ("the transferee company") offers to acquire shares of Company B ("the transferor") and the scheme or contract to which the offer relates is accepted by holders of nine-tenths of the shares for which the offer is made Company A may then compulsorily acquire the remaining 10 per cent (or less) of the shares so as to achieve a complete 100 per cent acquisition of the shares: CA, s.210.
It is standard procedure in making a take-over bit to state that if 90 per cent acceptance is attained compulsory acquisition under s.210 will follow. Company A may resort to s.210 whether it offers its own shares or cash for shares of Company B. The procedure is available if Company A already owns shares of Company B and offers to acquire those which it does not already own (but see para 22 below.) The non-accepting minority may however apply to the court to prevent Company A from acquiring their shares. The rules of procedure are explained below.
The offer must be made by a company to acquire shares of another. S.210 is not available to an individual who makes a take-over bid (but he can always form a company for the purpose: provided no fraud or imoproper conduct is involved: Re Bugle Press Ltd.
If Company A directly or through subsidiaries owns more than one-tenth of the shares of Company B then (in order to be able to use s.210) Company A must:
(a) offer the same terms for all the shares which it does not already own;
(b) obtain acceptances from holders who are three-quarters in number as well as holders of 90 per cent of the shares.
The wording of s.210 is ambiguous but it is generally taken that Company A must offer to acquire all of the shares of Company B which it does not already own if it is then to use s.210 to acquire the remaining shares in Company B (or all the shares of the class) for which the offer is made.