OCBA - Restrictions on Acquisition

Offer to purchase co-operative's shares

An offer to purchase a co-operative's shares in certain circumstances must not be made before it has been approved by special resolution by means of special postal ballot, and approval by CBS.

Other provisions, for any proposal involving conversion of a co-operative to a company prohibit reckless, manipulative or irresponsible public announcements in relation to an offer to purchase shares in the co-operative and require additional disclosure. (s285, 286, 289 and 290)

Relevant interest and Substantial share interest

A person must give notice to a co-operative within five business days after becoming aware that the person has a:

relevant interest in a member's right to vote or
substantial share interest in the co-operative.

A person who has power to vote in respect of a right to vote has a relevant interest in the right to vote. A person who has power to dispose of a share has a relevant interest in the share.

A person has a substantial share interest in a co-operative if the nominal value of the shares in the
co-operative in which the person has a relevant interest represents five per cent or more of the nominal value of the issued share capital of the co-operative. (s272, 273 and Schedule two, clause two, and forms 13, 17, 18, 19)

Limitation of share interest

A person must not have a relevant interest in the shares of a co-operative that exceeds 20% of the nominal value of the issued share capital (unless CBS specifies a greater per cent).

The limit may be increased in respect of a particular person if approved by special resolution by means of a special postal ballot. The approval of CBS is required if the interest is held by other than a co-operative. (s275) See page 40 of the policy pdf.

Where the authorised limit is exceeded, the board must forfeit sufficient of the shares to remedy the contravention. (s276)

A co-operative must inform CBS within 14 days after the board becomes aware that a person has a relevant interest exceeding the 20% limit or of any change in the number of shares in which that person has a relevant interest. (s279)

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Restrictions on Acquisition

On this page

Offer to purchase co-operative's shares

Relevant interest and Substantial share interest

Limitation of share interest