Corporations Act 2001

The offers made under an off‑market bid, and the takeover contracts, are varied under this section if:

the bidder purchases securities in the bid class outside the bid during the bid period; and:

the consideration for that purchase consists solely of a cash sum; and

either:

the consideration, or 1 of the forms of consideration, payable under the bid consists of a cash sum only and the consideration referred to in paragraph (b) is higher than the cash sum payable for the securities under the bid; or

a cash sum only is not the consideration, or 1 of the forms of consideration, payable under the bid.

Section 9 defines takeover contract.

The effect of section 623 is that the purchase outside the bid has to be made through an on‑market transaction (see subsection 623(1) and paragraph 623(3)(b)).

If:

one of the forms of consideration offered to a person under an off‑market bid is a cash sum only; and

the person has not accepted the offer before the purchase outside the bid occurs;

The consideration payable for each security covered by a takeover contract arising from the acceptance of an offer for a cash sum only is increased to the highest outside purchase price. If the person who accepted the offer has already received the whole or any part of the consideration under the contract, they are entitled to receive the increase in consideration immediately.

If:

a person accepts an offer under a bid at any time during the bid period; and

the consideration paid or provided, or to be paid or provided, under the takeover contract arising from the acceptance of the offer does not consist of a cash sum only;

the person may elect to take as consideration for each security covered by the takeover contract a cash sum equal to the highest outside purchase price instead of the consideration they originally accepted; and

the bidder must give the person a written notice of their right to make the election within 14 days after the end of the offer period.

Section 651B says how the election is to be exercised.

An offence based on subsection (4) is an offence of strict liability.

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