ASIC RG 10 — ASIC Regulatory Guide – RG 10 Compulsory acquisitions and buyouts

Page 1 REGULATORY GUIDE 10 Compulsory acquisitions and buyouts July 2026 About this guide This guide is for persons who are undertaking, or are subject to, a compulsory acquisition under Ch 6A of the Corporations Act. It is also for persons who are required to give, or are entitled to, buyout rights. This guide:  discusses the purposes underlying compulsory acquisition and buyout rights and how we administer the provisions of Ch 6A;  explains the exemptions we have provided and modifications we have made to the relevant requirements, and when we will consider relief from the provisions; and  outlines our process for nominating persons to prepare an expert’s report under s667AA. Page 2 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 2 About ASIC regulatory documents In administering legislation ASIC issues the following types of regulatory documents. Consultation papers: seek feedback from stakeholders on matters ASIC is considering, such as proposed relief or proposed regulatory guidance. Regulatory guides: give guidance to regulated entities by:  explaining when and how ASIC will exercise specific powers under legislation (primarily the Corporations Act)  explaining how ASIC interprets the law  describing the principles underlying ASIC’s approach  giving practical guidance (e.g. describing the steps of a process such as applying for a licence or giving practical examples of how regulated entities may decide to meet their obligations). Information sheets: provide concise guidance on a specific process or compliance issue or an overview of detailed guidance. Reports: describe ASIC compliance or relief activity or the results of a research project. Document history This guide was issued in July 2026 and is based on legislation and regulations as at the date of issue. Previous versions: • Superseded Regulatory Guide 10, issued June 2013 and reissued March 2024. Disclaimer This guide does not constitute legal advice. We encourage you to seek your own professional advice to find out how the Corporations Act and other applicable laws apply to you, as it is your responsibility to determine your obligations. Examples in this guide are purely for illustration; they are not exhaustive and are not intended to impose or imply particular rules or requirements. Page 3 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 3 Contents A Overview ........................................................................................... 4 The objectives of compulsory acquisition and buyout rights ............. 4 The types of compulsory acquisition under Ch 6A ............................ 5 When buyout rights arise ................................................................... 7 ASIC’s role ......................................................................................... 8 B Post-bid compulsory acquisition ................................................. 10 Principles underlying post-bid compulsory acquisition .................... 10 The requirement to bid for all securities .......................................... 12 The 90% relevant interest threshold ................................................ 13 The 75% acquisition threshold......................................................... 14 Compulsory acquisition of employee and other non-transferable securities .......................................................................................... 17 C General compulsory acquisition .................................................. 21 Principles underlying general compulsory acquisition ..................... 21 Full beneficial interests .................................................................... 22 The six-month limit for general compulsory acquisition ................... 25 Employee performance rights .......................................................... 27 D Buyout rights ................................................................................. 29 Principles underlying the buyout provisions .................................... 29 Concurrent post-bid compulsory acquisition and buyout rights relating to bid class securities .......................................................... 30 General compulsory acquisition and post-bid buyouts of convertible securities .......................................................................................... 33 E Expert reports ................................................................................ 36 When an expert report is required ................................................... 36 Applying for nomination of experts .................................................. 37 Our registers of experts ................................................................... 38 How we nominate experts ............................................................... 38 F Lodging compulsory acquisition and buyout documents ........ 40 Form of notices to be lodged with ASIC and provided to the relevant market operator and company ......................................................... 40 Providing accompanying documents to ASIC ................................. 42 Appendix: Accessible version of Figure 1 .......................................... 43 Key terms ............................................................................................... 44 Related information ............................................................................... 46 Page 4 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 4 A Overview Key points The compulsory acquisition provisions are intended to balance the interests of the overwhelming owner of an entity with the need to safeguard the interests of minority holders. Corresponding rights to be bought out ensure that remaining holders can avoid being ‘locked-in’ to a minority position. Our role in relation to the compulsory acquisition and buyout rights regimes includes granting relief from the provisions in appropriate circumstances, nominating experts to prepare reports and administering unclaimed proceeds resulting from the process. In some cases, the court may have a role approving the compulsory acquisition or stopping the acquisition. The compulsory acquisition regime extends to the acquisition of securities of listed and unlisted companies, listed registered schemes and listed bodies that are not companies but are incorporated or formed in Australia. The objectives of compulsory acquisition and buyout rights The compulsory acquisition regime RG 10.1 Chapter 6A of the Corporations Act 2001 (Corporations Act) gives a person a right to compulsorily acquire securities under certain circumstances, depending on the level of a person’s interest in the relevant class of securities or the relevant entity overall. RG 10.2 The objective of the compulsory acquisition regime in Ch 6A is to balance the interests of the overwhelming owner of an entity with the need to safeguard the interests of minority holders. This balance involves allowing the overwhelming owner to gain access to the economic, administrative and tax-related benefits of full ownership while ensuring minority interest holders: (a) are treated fairly; (b) are given sufficient information relevant to the acquisition and their rights; and (c) where necessary, have access to external scrutiny through the courts and ASIC’s regulatory oversight. Note: In this guide, references to sections (s), chapters (Ch), divisions (Div) and parts (Pt) are to the Corporations Act, unless otherwise specified. Page 5 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 5 RG 10.3 The compulsory acquisition provisions also help prevent the practice of ‘greenmailing’, where minority holders seek prices in excess of fair value in exchange for delivering full ownership. This is consistent with the regulatory objective of avoiding both minority oppression and minority dictation. The buyout rights regime RG 10.4 Chapter 6A also provides a buyout right for minority interest holders where a person has acquired an interest in all or most of the securities in a class. This right allows remaining holders and the holders of convertible securities to require the major interest holder to purchase their securities—for example, where the major holder decides not to utilise compulsory acquisition. RG 10.5 The objective of buyout rights is to ensure that remaining holders have an opportunity to avoid being ‘locked-in’ as a minority when another person has acquired an interest in the vast majority of the securities in the relevant class (or, in the case of convertible securities, the underlying class) as a result of a scheme or offers made to holders. Entities subject to the compulsory acquisition and buyout provisions RG 10.6 As well as securities in a company, compulsory acquisition and buyout rights extend to interests in listed registered schemes and securities in listed bodies that are not companies: see s660A and 660B. Similar principles apply to investments in these entities. RG 10.7 Discussion in this guide that refers to securities in a company should be taken to include equivalent references in the context of listed bodies and interests in a listed registered scheme. Adjustments that take account of the different features of registered schemes are set out in s660B(1). RG 10.8 Neither the compulsory acquisition provisions nor the takeover provisions apply to interests in unlisted managed investment schemes: see s604. However, the compulsory acquisition provisions do apply to an unlisted registered scheme that was previously listed at the end of a bid or at the time a compulsory acquisition notice is lodged: see s660B(2) and (3). The types of compulsory acquisition under Ch 6A RG 10.9 There are two types of compulsory acquisition under Ch 6A of the Corporations Act: (a) compulsory acquisition following a takeover bid under Pt 6A.1 (post- bid compulsory acquisition); and (b) general compulsory acquisition under Pt 6A.2. Page 6 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 6 RG 10.10 Table 1 outlines when the right to compulsorily acquire securities arises under Ch 6A and the terms on which the compulsory acquisition may take place. All securities acquired as part of the compulsory acquisition process must be acquired on the same terms: see s661C and 664B. Table 1 also includes a cross-reference to the prescribed ASIC form to be used when undertaking the relevant type of compulsory acquisition. RG 10.11 A court may stop the compulsory acquisition process if it is satisfied that the terms of the acquisition do not give fair value for the securities: see s661E(2) and 664F(3). Table 1: Compulsory acquisition under Ch 6A Type of acquisition When securities may be acquired What a holder must receive ASIC form Post-bid compulsory acquisition: s661A(1) A bidder may compulsorily acquire any remaining securities in the bid class at the end of a full takeover bid if it has met the compulsory acquisition threshold. To meet the threshold the bidder must:  have a relevant interest in 90% of the bid class securities (by number) during or at the end of the bid; and  have acquired 75% of the securities (by number) that the bidder made offers for under the bid. The compulsory acquisition may also extend to:  any bid class securities issued or granted after the offer period up until the time the compulsory acquisition notice is given;  any securities coming into the bid class on exercise or conversion of convertible securities up to six weeks after the notice is given;  certain non-transferable securities that would be in the bid class but for a restriction on transfer in the constitution (see RG 10.61–RG 10.74); and  any other bid class securities in which the bidder already has a relevant interest. Post-bid compulsory acquisition on the basis of the threshold tests must commence with the dispatch of notices no later than one month after the end of the offer period. Alternatively, a court can approve post-bid compulsory acquisition even where the threshold is not met: s661A(3). The bidder must acquire all of the securities on the terms that apply, or applied, to the bid at the time the compulsory acquisition notice is given. Where alternative forms of consideration are available under the bid, the holder may make an election with a default choice applying if no election is made. Form 6021 Page 7 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 7 Type of acquisition When securities may be acquired What a holder must receive ASIC form General compulsory acquisition: s664A(3) Under general compulsory acquisition, any person can compulsorily acquire:  all of the securities in a class if the person (together with any related body corporate) holds full beneficial interests in 90% or more of the securities (by number) in the class; or  all the securities in every class of shares or securities convertible into shares, if the person: − has 90% or more voting power in the company; and − holds, together with any related bodies corporate, full beneficial interests in 90% or more of all the securities (by value) in the company that are either shares or convertible into shares. The right to compulsorily acquire a class expires if the process is not commenced within six months of the right arising: s664AA. The acquirer must propose to provide a cash sum for the securities. The acquirer must also include with the compulsory acquisition notice an expert report discussing whether the proposed terms of the acquisition are fair value and (where applicable) whether the acquirer has met the test of having full beneficial interests in 90% of all securities by value. Form 6024 Note: The full titles of the ASIC forms in this table are listed in the ‘Related information’ section of this guide. You should complete and lodge these forms using the transaction named ‘Lodge compulsory acquisition and buy out notices’ in the ASIC Regulatory Portal. When buyout rights arise RG 10.12 If a bidder has a relevant interest in 90% or more (by number) of the securities in the bid class at the end of a takeover bid, or a person completes general compulsory acquisition of a class of securities, any remaining holders of securities in the class, or securities convertible into the class, may have a right to be bought out under Ch 6A. A summary of when buyout rights of this kind arise is set out in Table 2. RG 10.13 Under the buyout procedure the bidder or full owner must make buyout offers and notify holders of their right to be bought out. Within one month of this notification, a holder may respond with a notice requiring the bidder to buy them out. The holder’s notice gives rise to a contract for sale on the relevant terms set out in Table 2. Note: For the purposes of calculating when the one-month time limit begins, notices sent by post are taken to be given three days after posting, regardless of when they actually arrive: see s669A. Page 8 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 8 Table 2: Buyout rights under Ch 6A Type of buyout right Securities available for buyout Offer and contract terms ASIC form For bidders with a relevant interest in 90% of bid class securities (by number) at bid’s end Post-bid buyout of bid- class securities: s662A(1) Remaining securities in the bid class (except securities issued after the offer period closed, or after a notice of status of conditions was given if the bid was conditional). Unless the bidder and holder agree on other terms, the terms that applied to the bid at the end of the offer period apply to the buyout contract. Where alternative forms of consideration were offered under the bid, the holder may make an election. Otherwise a default choice specified by the bidder will apply. Form 6022 Post-bid buyout of convertible securities: s663A(1) Any securities convertible into bid class securities (unless a post-bid compulsory acquisition notice or buyout notice has already been given for the convertible securities). Terms must be proposed in the notice. The holder must be given an expert report discussing whether the proposed terms of the acquisition are fair value. If the holder responds with a notice requiring the bidder to buy them out, the terms of the buyout may be either:  terms previously agreed between the bidder and the holder; or  terms determined by a court on application by the holder. Form 6023 For bidders with full beneficial interests in all securities in a class through general compulsory acquisition Buyout of convertible securities following general compulsory acquisition: s665A(2) Any securities convertible into the class that was compulsorily acquired (unless a post-bid or general compulsory acquisition notice or a bid class buyout notice has already been given for the convertible securities). A cash sum must be proposed in the notice. The holder must be given an expert report discussing whether the proposed terms of the acquisition are fair value. If the holder responds with a notice requiring the bidder to buy them out, the terms of the buyout may be either:  terms previously agreed between the acquirer and the holder; or  terms determined by a court on application by the holder. Form 6025 Note: The full titles of the ASIC forms in this table are listed in the ‘Related information’ section of this guide. You should complete and lodge these forms using the transaction named ‘Lodge compulsory acquisition and buy out notices’ in the ASIC Regulatory Portal. ASIC’s role RG 10.14 ASIC has a number of functions and powers in relation to compulsory acquisitions and buyouts under Ch 6A. We monitor compulsory acquisition and buyout procedures to ensure compliance with the provisions and purposes underlying Ch 6A. Page 9 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 9 RG 10.15 We also have a general exemption and modification power in relation to Ch 6A: see s669. Where appropriate, we may provide relief from certain requirements. We have also used ASIC’s power to provide relief to clarify and enhance the objectives of the regime. Our legislative instruments, and some of the relief we may give, are discussed further in this guide. RG 10.16 In certain situations, a person using compulsory acquisition, or notifying a holder of buyout rights, must provide an expert report with the relevant notice. In these cases, ASIC has a role in nominating the persons who may prepare the expert report: see s667AA. RG 10.17 We also administer the proceeds of compulsory acquisition that have not been claimed by security holders. A person completing compulsory acquisition of securities is entitled to pay the relevant consideration to, and be registered as holder of the securities by, the company that issued the securities if they do not settle directly with the holder (e.g. because the holder is uncontactable). The company will retain records of holders’ entitlements and publish in the ASIC Gazette, by the end of the following February, details of any entitlements remaining as at the end of December. The consideration is transferred to ASIC within a month of the anniversary of the records being published—after which we administer the consideration and assess claims from former holders who are entitled to receive the proceeds of the compulsory acquisition. Note: For further information on unclaimed proceeds held by ASIC, including how to make a claim, see ASIC’s Moneysmart website. Page 10 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 10 B Post-bid compulsory acquisition Key points Post-bid compulsory acquisition allows a bidder to acquire any outstanding bid class securities during or after a takeover bid if: • the bidder acquires a relevant interest in 90% of all bid class securities and 75% of the securities for which offers were made; or • a court otherwise approves the acquisition. The purpose of the thresholds for post-bid compulsory acquisition is to demonstrate overwhelming acceptance of the terms of a bid. This justifies the compulsory acquisition of remaining holders on those terms. The requirement to bid for ‘all the securities in the bid class’ in s661A(1)(a)(i) means a full bid must be made to utilise post-bid compulsory acquisition. We have modified the 75% acquisition test and 90% relevant interest test to include and exclude certain holdings and acquisitions from the calculation, consistent with the underlying policy of the threshold tests. We have also modified Ch 6A to allow for post-bid compulsory acquisition of non-transferable employee securities in a different class to the bid class in certain circumstances. Principles underlying post-bid compulsory acquisition RG 10.18 Under post-bid compulsory acquisition, a bidder may compulsorily acquire securities in the bid class on the same terms as under the bid, provided two threshold tests are met: (a) the bidder and their associates have relevant interests in at least 90% of the securities in the bid class at some point during the offer period (s661A(1)(b)(i)); and (b) the bidder and their associates have acquired at least 75% of the securities that the bidder offered to acquire under the bid, whether the acquisitions happened under the bid or otherwise (s661A(1)(b)(ii)). RG 10.19 A bidder may also initiate compulsory acquisition following a takeover bid with court approval: see s661A(3). Post-bid compulsory acquisition on the basis of the threshold tests RG 10.20 The basic principle underlying post-bid compulsory acquisition is that, where the terms of a takeover bid have received overwhelming acceptance, the bidder should generally be able to acquire any remaining bid class securities on those terms, unless the acquisition is otherwise shown to be unfair. Page 11 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 11 RG 10.21 The efficiency and integrity of the takeover bid process under Ch 6 of the Corporations Act is therefore an important part of post-bid compulsory acquisition procedures. These procedures and protections underwrite the premise of the post-bid compulsory acquisition provisions, that satisfaction of the thresholds indicates widespread, fully informed and genuinely independent acceptance of the bid terms. The procedures and protections set out in Ch 6 are designed to ensure that: (a) the acquisition of control under a takeover bid takes place in an efficient, competitive and informed market; and (b) target holders have sufficient information to assess the merits of the takeover offer and are treated equally: see s602. RG 10.22 Accordingly, an additional purpose of Ch 6 is to ensure that an appropriate procedure is followed as a preliminary to compulsory acquisition under the post-bid compulsory acquisition provisions: see s602(d). If a bidder satisfies the post-bid compulsory acquisition thresholds in a way that is not appropriate, the takeovers panel may make a declaration of unacceptable circumstances: see s657A(2)(b). RG 10.23 The onus is placed on objectors to initiate court action to show the consideration offered is not fair value for the securities under post-bid compulsory acquisition: see s661E(1). This is justified because there is already some evidence that the offer price is fair value: (a) the price has been overwhelmingly accepted by holders independent of the bidder—as demonstrated by satisfaction of the threshold tests; and (b) these thresholds have been satisfied within the protective framework of Ch 6 and the bid process. Court-approved post-bid compulsory acquisition RG 10.24 Even where the threshold tests have not been met, a bidder may utilise post- bid compulsory acquisition with the approval of the court. RG 10.25 The court’s approval power provides additional flexibility to the post-bid compulsory acquisition procedure and addresses any arbitrariness in the precise 90% relevant interest threshold. For example, the court may allow post-bid compulsory acquisition to proceed where: (a) the bidder is unable to satisfy the threshold tests due to untraceable holdings in the target; or (b) the bidder achieves a relevant interest in the target that is marginally below the 90% threshold (Re Sylvania Resources Ltd (2009) 74 ACSR 29). Page 12 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 12 The requirement to bid for all securities RG 10.26 One of the requirements to utilise post-bid compulsory acquisition following an off-market bid is that the bidder must have made its bid for ‘all the securities in the bid class’: see s661A(1)(a)(i). RG 10.27 We interpret this requirement to mean that the off-market bid must be a full bid, not a proportional bid (i.e. it must be a bid for all the bid class securities on issue at the date set by the bidder under s633(2)). The language ‘all the securities in the bid class’ in s661A(1)(a)(i) is identical to the language in s618(1)(a), where it is used to refer to a full bid rather than a proportional bid made in accordance with s618(1)(b). RG 10.28 Requiring a full bid is consistent with the principles underlying compulsory acquisition. Section 661A assists bidders seeking 100% ownership of the target, while balancing the interests of minority holders. A bidder seeking to maximise its chance of obtaining 100% ownership should not make a proportional bid. RG 10.29 The 75% acquisition test for securities the bidder offered to acquire in s661A(1)(b)(ii) would also be imperfect in demonstrating overwhelming acceptance of the bidder’s offer in the case of a proportional bid. The bidder must give holders the opportunity to accept into the bid for their entire holding of bid class securities. Securities issued after the s633(2) record date RG 10.30 The language ‘all the securities in the bid class’ does not mean the bidder must have bid for all possible bid class securities, including those issued after the record date determined by the bidder under s633(2). It means a full bid, rather than a proportional bid, must be made: see RG 10.27. RG 10.31 The view that an ‘ordinary’ full bid is an offer for all existing securities at the s633(2) date is reinforced by the language of s617 and s618. Under s617(1), a takeover bid relates to securities that exist, or will exist, as at the record date set by the bidder under s633(2). If the language in s618 covered securities issued after the s633(2) date due to the exercise of convertible securities, this would mean that under s618 the bidder must offer to acquire these later issued securities under the bid. This would be inconsistent with the permissive language in s617(2) that the bid may extend to later issued securities. Note: For further discussion of the securities to which a takeover bid relates, see Section B of Regulatory Guide 9 Takeover bids (RG 9). RG 10.32 Also, if the bidder were required to bid for later issued securities as a precondition to compulsory acquisition under s661A, this would indicate a policy that all holders must receive an offer under the bid before their securities can be compulsorily acquired. This is inconsistent with s661A(4), which allows the bidder to elect whether to compulsorily acquire securities issued after the end of the offer period. Page 13 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 13 The 90% relevant interest threshold RG 10.33 Under s661A(1)(b)(i), a bidder seeking to engage post-bid compulsory acquisition must have, together with its associates, a relevant interest in 90% of the securities in the relevant class during or at the end of the offer period. A bidder who meets the 90% relevant interest test at some time during the offer period is not disqualified if it ceases to satisfy the test because of the issue of further securities in the bid class. ASIC modification: Deemed relevant interests RG 10.34 Under s661A(2), any relevant interests that the bidder has ‘merely because of the operation of subsection 608(3) (relevant interest by 20% interest in body corporate)’ must be disregarded in determining whether the 90% relevant interest threshold for post-bid compulsory acquisition has been met. RG 10.35 ASIC Corporations (Compulsory Acquisitions and Buyouts) Instrument 2023/684 modifies s661A(2) to: (a) clarify that deemed relevant interests arising from a controlling interest in a body corporate or managed investment scheme are not excluded (i.e. deemed interests under s608(3)(b)); and (b) extend the operation of the provision so that deemed relevant interests of the bidder’s associates under s608(3)(a) are excluded. RG 10.36 The 90% relevant interest test is a test of overwhelming ownership of the relevant class of securities. If the only interest in securities arises under s608(3)(a) as a result of the ownership of 20% or more of a body corporate or managed investment scheme with a relevant interest in the securities, it may be artificial to count those securities for the purposes of determining an overwhelming ownership of the entity. Deemed holdings of this kind are therefore excluded under s661A(2). Note: The operation of s661A(2) means, for example, that where a bidder has 20% voting power in, but not control of, another entity that holds bid class securities, the entity may need to accept into the bid for the bidder to be able to count the relevant interests it has in the bid class securities for the purposes of the 90% relevant interest test. Deemed relevant interests on the basis of controlled entities RG 10.37 Section 661A(2) refers to s608(3), under which a person is deemed to have the relevant interests in securities that another body corporate or managed investment scheme has if: (a) their voting power in the entity is above 20% (s608(3)(a)); or (b) they control the entity (s608(3)(b)). Page 14 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 14 RG 10.38 We have modified s661A(2) to clarify that the exclusion from the 90% relevant interest test only applies to deemed relevant interests arising under the 20% limb in s608(3)(a). Our modification is consistent with the underlying purpose of the provision and the legislative intention evident from the parenthetical reference in s661A(2) to deemed relevant interests on the basis of a 20% or greater holding. Deemed relevant interests of associates RG 10.39 Our modification also extends the s661A(2) exclusion to the relevant interest holdings of associates of the bidder. The 90% relevant interest test is based on the interests of both bidders and their associates. RG 10.40 We have made this modification because the policy underlying the exclusion of deemed relevant interests under s608(3)(a) applies equally to the interests of the bidder’s associates. RG 10.41 Without our modification it may be possible for a bidder to avoid the exclusion in s661A(2) by seeking to rely on deemed relevant interests held by associates to satisfy the 90% relevant interest test. The 75% acquisition threshold RG 10.42 As well as satisfying the 90% relevant interest test, a bidder and its associates must have acquired 75% of the securities the bidder offered to acquire under the bid in order to utilise post-bid compulsory acquisition: s661A(1)(b)(ii). The purpose of this additional test is to ensure that overwhelming acceptance of the bid terms is demonstrated even in cases where the bidder and its associates started the bid with a significant holding in the target. RG 10.43 The 75% acquisition test requires that the bidder and its associates ‘acquire’ the bid class securities, rather than simply obtain a relevant interest in the securities. The acquisitions need not be made under the bid. However, the prohibition in s623(1) on the bidder and its associates offering collateral benefits means that, generally, the only acquisitions the bidder and its associates will make outside the bid during the offer period will be through on-market purchases: see s623(3)(b). ASIC modification: Excluded acquisitions RG 10.44 ASIC Instrument 2023/684 modifies s661A to ensure that, when calculating whether the 75% acquisition test has been met, the following are excluded: (a) securities in which the bidder or their associates had a relevant interest as at the date of the first offer under the bid, other than securities acquired before that date in reliance on item 2 of s611; and (b) securities issued to an associate of the bidder during the offer period. Page 15 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 15 RG 10.45 Under our modification, these securities are excluded from being counted both as part of the number of securities ‘acquired’ and as part of the number of securities ‘the bidder offered to acquire under the bid’. Having excluded securities from the number ‘acquired’, it may otherwise be impossible for the bidder to meet the 75% acquisition test if we did not also exclude them from the number the bidder ‘offered to acquire’. The securities are therefore excluded from both the numerator and denominator in the percentage calculation. RG 10.46 We have modified the 75% acquisition test in this way to: (a) clarify its operation with respect to securities in which the bidder or its associates had a relevant interest at the start of the offer, including acquisitions by the bidder from an associate (see RG 10.47–RG 10.54); and (b) ensure that it is consistent with the underlying principle that the bidder should only be able to utilise post-bid compulsory acquisition if its offer received overwhelming acceptance from independent holders. Securities acquired from associates RG 10.47 The 75% acquisition test applies to acquisitions during the offer period by ‘the bidder and their associates’, regardless of how the acquisition takes place. It may be unclear whether a bidder can satisfy the 75% acquisition test by acquiring an associate’s securities. RG 10.48 The wording of s661A(1)(b)(ii) suggests that to be counted in the test, securities must be acquired from persons other than the bidder or their associates. The test treats the bidder and their associates as a group, with the holdings of group members to be aggregated. RG 10.49 Under this approach, shares acquired by the bidder from an associate are not ‘acquired’ under the test because they were already held by ‘the bidder and their associates’. This also means the bidder cannot double count securities acquired by an associate during the offer period that the bidder acquired in turn. RG 10.50 ASIC Instrument 2023/684 clarifies this approach by expressly excluding any securities in which the bidder’s associates have a relevant interest from the 75% acquisition test. Securities acquired under s611 item 2 RG 10.51 ASIC Instrument 2023/684 modifies the operation of s661A(1)(b)(ii) to expressly exclude, from the 75% acquisition test, any securities in which the bidder or their associates have a relevant interest at the date of the first offer under the bid. Page 16 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 16 RG 10.52 As part of that modification, ASIC Instrument 2023/684 also clarifies that relevant interests acquired in reliance on s611 item 2 during the bid period are nevertheless included in the calculation of the 75% acquisition test: see notional s661A(2A)(a)(i) (as inserted by ASIC Instrument 2023/684). Our modification ensures any securities a bidder may acquire under s611 item 2 before offers are made are treated in the same way as acquisitions under the bid for the purposes of the 75% acquisition test, irrespective of whether the relevant acquisitions are made during the bid period prior to the commencement of the offer period. This upholds the underlying policy that the compulsory acquisition process should be available to a bidder where the threshold is satisfied by acceptances of independent holders. Securities in which the bidder already has a relevant interest RG 10.53 There is a question whether a bidder is able to ‘acquire’ securities in which it already has a relevant interest for the purposes of s661A(1)(b)(ii). Our modification excludes acquisitions of this kind from the 75% acquisition test, as the holder of the securities would not be clearly independent of the bidder. RG 10.54 Our modification also ensures that the narrower ‘relevant interest’ concept in s661A(2) does not apply to the 75% acquisition test (only the 90% relevant interest test). This means that the usual test for a relevant interest in s608 (including the deeming provision in s608(3)(a)) applies for the purposes of determining whether securities are excluded from the 75% acquisition test under our modification in ASIC Instrument 2023/684, due to the bidder having had a relevant interest in the securities at the date of the first offer under the bid. Securities issued to the bidder’s associates RG 10.55 If the target issues securities to the bidder’s associates during the offer period, it is possible that the securities are ‘acquired’ for the purposes of the 75% acquisition test. Without our modification, these securities may be counted towards meeting the test if the bidder has offered to purchase them under the takeover bid. RG 10.56 Our modification excludes these securities because acquisitions by the bidder’s associates of shares issued directly by the target may be unrelated to the bid, and counting them would not promote the aim of the 75% acquisition test of measuring acceptance of the bid by independent holders. Page 17 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 17 ASIC modification: Bids for convertible securities RG 10.57 ASIC Instrument 2023/684 also modifies s661A(1) to provide relief from the 75% acquisition test when the bid class for a takeover offer is convertible securities. Under our modification, convertible securities that are exercised or converted between the date under s633(2) and the end of the offer period will be excluded from the number of convertible securities that the bidder offered to acquire under the bid. Note: The date under s633(2) is the date set by the bidder for determining to whom offers under the bid will be sent. RG 10.58 Holders may exercise their convertible securities after the bidder has determined to whom it must send its offers for convertible securities—often to accept a simultaneous offer by the bidder for the underlying securities. The bidder’s offer for underlying securities may extend to securities that come into existence following conversion or exercise of the convertible securities or derivatives: see s617(2) (as modified by paragraph 5(a) of ASIC Corporations (Takeover Bids) Instrument 2023/683). RG 10.59 Our modification is consistent with the underlying purpose of the 75% acquisition test of determining whether holders overwhelmingly accepted the offer under the takeover bid. If a holder exercises their convertible securities rather than accepting the offer for the convertible securities under the bid, the holder will neither have accepted nor directly rejected the bidder’s offer. The holder may have exercised the convertible securities for other reasons. Even if the holder preferred an offer by the bidder for the underlying securities, the exercise of convertible securities itself does not show that the bidder’s offer for the convertible securities was unfair. RG 10.60 Without our modification, if a substantial proportion of holders exercise their convertible securities after the offer under the bid, it may be impossible for the bidder to meet the 75% acquisition test. This is because the bidder cannot count convertible securities that are exercised as securities acquired by it (the numerator in the percentage calculation) but these convertible securities would still be counted as securities that the bidder offered to acquire (the denominator). Compulsory acquisition of employee and other non-transferable securities RG 10.61 Some target companies may have issued to employees non-transferable securities as part of an employee incentive plan. RG 10.62 A company issues ‘non-transferable employee securities’ with the purpose of remunerating employees while aligning their interests with those of the company. Non-transferable employee securities prevent employees from taking profits immediately and reinforce the interdependence of the company and the employee. Page 18 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 18 Non-transferable securities as a separate class RG 10.63 In some cases, non-transferable employee securities will be in a separate class to the bid class. A non-transferable security will be in a different class to other securities if it ‘differs sufficiently in respect of rights, benefits, disabilities, or other incidents, as to make it distinguishable from any other category of shares’: see Clements Marshall Consolidated Ltd v ENT Ltd (1988) 13 ACLR 90, 93. RG 10.64 In the case of a share that differs from ordinary shares only because of restrictions on transfer, it is most likely that the share is in a different class if the constitution or terms of issue of the share provide that the share is non- transferable. In this case, it is clear the inability to transfer is attached to the share. RG 10.65 In some employee share schemes, shares are purchased on-market and transferred into trust for the benefit of the employee. The share will not be in a separate class if it cannot be transferred merely because, in the case of an employee, it is subject to a trust. In this case, the inability to transfer is not attached to the shares but to the employee. ASIC modification: Non-transferable employee securities RG 10.66 The restrictions on non-transferable employee securities mean that they cannot be acquired by the bidder under a bid. If the employee securities are in their own class, it is impossible for the bidder to meet the post-bid compulsory acquisition threshold tests under a bid for the employee securities, by: (a) achieving a 90% relevant interest in all securities in the bid class; and (b) acquiring 75% of all securities that the bidder offered to acquire under the bid: see s661A(1)(b). Note: A person may, however, compulsorily acquire non-transferable employee securities, even if they are unable to acquire full beneficial interests in 90% of them, if the requirements for general compulsory acquisition in s664A(2) are met. RG 10.67 ASIC Instrument 2023/684 modifies s661A(1) so that if a bidder compulsorily acquires bid class securities it may also compulsorily acquire non-transferable employee securities where: (a) the employee securities are in a different class to the bid class merely because they are non-transferable (e.g. employee shares that would be ordinary shares if they were transferable); and (b) the employee securities, if included in the bid class, would not exceed 10% of all bid class securities (by number worked out at the end of the offer period). Page 19 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 19 RG 10.68 We have made this modification to ensure a bidder or 90% holder is not prevented from acquiring 100% ownership of a company merely because employee securities are non-transferable. As noted in the Explanatory Memorandum to the CLERP Bill at para 7.40: Compulsory acquisition of each class of securities can be difficult … where there are restrictions on transferring some securities (for example, securities issued under employee share schemes). RG 10.69 Our modification counters the possible defensive effect of non-transferable employee securities. Many bidders seek 100% ownership of the target. Uncertainty about whether a bidder can compulsorily acquire non- transferable securities may be a factor in discouraging takeover bids. RG 10.70 Our modification in ASIC Instrument 2023/684 is supported by various indications that the compulsory acquisition provisions were intended to cover non-transferable securities: (a) the Explanatory Memorandum to the CLERP Bill suggests that Ch 6A was intended to cover non-transferable securities: see RG 10.68; (b) the compulsory acquisition provisions ‘apply despite anything in the constitution of the company’: see s661A(5) and 664A(4); and (c) the definition of ‘convertible securities’ in s9 states that: ‘An option may be a convertible security even if it is non-renounceable’. The language ‘non-renounceable’ suggests that the definition covers non- transferable options. Compulsory acquisitions extend to ‘convertible securities’. How our modification operates RG 10.71 Our modification treats non-transferable employee securities similarly to bid class securities issued during or after the offer period. The bidder may elect to compulsorily acquire later issued securities if it acquires bid class securities: see s661A(4)(b) and (c). RG 10.72 For the purposes of our modification, securities are ‘non-transferable’ when the constitution of the company or the terms of issue of the securities restricts their transfer. An ‘employee security’ is a security issued under a scheme to, or for, the benefit of employees or non-executive directors of the company (or a related body corporate) in relation to their employment or services. Note: Our modification is unnecessary in the case of securities that are non-transferable only because they are held in trust under an employee share scheme. A trustee cannot resist compulsory acquisition merely because of the terms of a trust. In a compulsory acquisition the securities will be transferred regardless of the trust under the procedure for transfer in s666B. Page 20 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 20 RG 10.73 The ASIC Form 6021 Notice of compulsory acquisition following takeover bid includes a section for use when the bidder acquires non-transferable employee securities as well as bid class securities. For the avoidance of doubt, we also modify s661A(5), 664A(4) and Pt 6A.3 of Ch 6A so that non- transferable employee securities can be transferred in completion of a compulsory acquisition, regardless of any restraint under the terms of issue of the securities as well as the constitution of the company. RG 10.74 The terms of our relief seek to ensure that compulsory acquisition processes are as similar as is practicable between non-transferable employee securities and other securities that would be in the same class except for the employee securities being non-transferable. ASIC relief: Other cases of non-transferable securities RG 10.75 We may give relief to allow post-bid compulsory acquisition of non- transferable securities in circumstances where ASIC Instrument 2023/684 does not apply. Employee securities exceeding 10% of combined bid class RG 10.76 A requirement of our modification in ASIC Instrument 2023/684 is that if the employee securities were bid class securities, they would not exceed 10% of the bid class securities: see RG 10.67(b). Under our relief, the bidder does not have to meet the 90% relevant interest and 75% acquisition tests for the employee securities, as this would be impossible. This is more justifiable where the employee securities are a minor class. RG 10.77 We will consider relief in the unusual circumstance that the employee securities exceed 10%. We will take into account the circumstances of the issue of this number of securities under the employee share scheme, including any indication that the scheme was administered with a defensive purpose. Other non-transferable securities RG 10.78 We may consider applications for relief to compulsorily acquire non- transferable securities other than employee securities. In considering relief of this kind we will take into account the nature and purpose of the restriction on transfer. Page 21 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 21 C General compulsory acquisition Key points General compulsory acquisition allows an overwhelming owner of a class of securities, or the voting rights and value of an entity, to compulsorily acquire the remaining securities, regardless of whether they have made a takeover bid for the relevant class. We may give relief so that a registered managed investment scheme, or a person who has granted a security interest over their holding, can meet the 90% full beneficial interest test for general compulsory acquisition in s664A(1) or (2). We may grant relief to stop the six-month time period for commencing general compulsory acquisition running during court proceedings or when a person’s holding is involuntarily diluted below the 90% full beneficial interest threshold. Principles underlying general compulsory acquisition RG 10.79 Under general compulsory acquisition, a person who is a 90% holder in relation to a class of securities may compulsorily acquire all the remaining securities in that class in which neither the person nor any related bodies corporate have full beneficial interests: see s664A(3). RG 10.80 A person is a 90% holder in relation to a particular class of securities if the person (together with any related bodies corporate) holds full beneficial interests in at least 90% of the securities (by number) in that class: see s664A(1). RG 10.81 Additionally, a person is a 90% holder in relation to all classes of shares, or securities convertible into shares, in a company if: (a) the person’s voting power in the company is at least 90%; and (b) the person holds, either alone or with a related body corporate, full beneficial interests in at least 90% by value of all the securities of the company on issue that are either shares or convertible into shares: see s664A(2). RG 10.82 Like post-bid compulsory acquisition, general compulsory acquisition facilitates access by the overwhelming owner of an entity to the benefits of full ownership. RG 10.83 The test in s664A(1) extends compulsory acquisition rights to the holder of an overwhelming majority of the securities in a class even when a takeover bid has not been made. When an overwhelming owner has acquired full beneficial interests in over 90% of each class of securities on issue, the owner will be able to obtain full ownership of all securities in the entity by utilising general compulsory acquisition on the basis set out in s664A(1). Page 22 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 22 RG 10.84 The alternative test for general compulsory acquisition in s664A(2) is designed to ensure that the holder of an overwhelming economic and control interest in an entity is able to access the advantages of full ownership regardless of the capital or ownership structure of the entity. Section 664A(2) overcomes the difficulties of class-by-class compulsory acquisition that may arise when there are a large number of classes on issue, a small number of holders in one or more classes, or restrictions on transferring or acquiring securities in a particular class. RG 10.85 Because general compulsory acquisition applies whether or not a takeover bid has been made, the procedure to be followed includes additional protections for minority shareholders: (a) the 90% holder must have a ‘full beneficial interest’ rather than a relevant interest to meet the 90% threshold: see s664A; (b) the 90% holder must offer a cash sum: see s664B; (c) the 90% holder must provide an independent expert report addressing whether the consideration is fair value with its compulsory acquisition notice and (to the extent not covered by the expert report) include disclosure of any other information material to deciding whether to object to the acquisition: see s664C(1); and (d) if holders of 10% or more of the securities covered by the notice object to the compulsory acquisition, the 90% holder must apply to the court for approval of the acquisition, and bear the cost of court proceedings, if it wishes to proceed with the compulsory acquisition: see s664F. RG 10.86 Further, in contrast to post-bid compulsory acquisition, if court proceedings are commenced, the onus is on the 90% holder to establish that their offer represents fair value: see s664F(3). Full beneficial interests RG 10.87 General compulsory acquisition operates by reference to an overwhelming owner’s full beneficial interests in securities. RG 10.88 An overwhelming owner relying on s664A(1) must have full beneficial interests in at least 90% of the securities in the class. RG 10.89 An overwhelming owner relying on s664A(2) must have full beneficial interests in 90% of all securities in the entity by value. An owner of this kind must provide an independent expert report that states whether, in the expert’s opinion, the owner meets the test in s664A(2)(c): see s667A(2). Section 667A(2) refers to the expert stating their opinion on the owner’s ‘full beneficial ownership’. Page 23 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 23 When we may give relief RG 10.90 We may give relief so that a person can meet the 90% full beneficial interest test for compulsory acquisition in s664A(1) or (2) even if the overwhelming owner’s interest may not constitute a full beneficial interest. We may give this relief when: (a) the holding is scheme property of a registered managed investment scheme (this relief treats the registered managed investment scheme as a single entity that owns the securities); or (b) the owner has granted a mortgage, charge or other security interest over the holding. RG 10.91 We provide this relief because, even where they may not have a full beneficial interest in securities, an overwhelming owner should be treated as a 90% holder if in a commercial sense they own 90% of the securities. In our view, a person owns securities in a commercial sense if they have both the benefit and risk attached to the securities. RG 10.92 Our relief will also mean that if the holding is scheme property or the overwhelming owner has given a mortgage, this will not prevent an expert from stating an opinion that the owner has full beneficial ownership in at least 90% (by value) of all the securities in the company for the purposes of s667A(2). RG 10.93 When we give this relief, we will make corresponding modifications so that s665A will apply to a holding that is scheme property or a holder who has given a mortgage although there may be no full beneficial interest. This preserves the operation of the buyout rights regime for convertible security holders following general compulsory acquisition. ASIC relief: Registered managed investment schemes RG 10.94 Where securities are held by a registered scheme, it is unlikely that the 90% full beneficial interest test in s664A(1) for general compulsory acquisition can be met by: (a) the responsible entity (or any custodian) of the scheme; or (b) the members of the scheme. Note: Ch 6A extends to the acquisition of interests in a listed registered scheme: see s660B. This problem is likely to become particularly apparent in a case where a registered scheme seeks to gain 100% ownership of a listed registered scheme. RG 10.95 It is unlikely that a managed investment scheme or its responsible entity (or any custodian) can be a 90% holder under s664A(1), because the responsible entity does not have a full beneficial interest in securities that are scheme property. Page 24 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 24 RG 10.96 It is also unlikely that a member of a managed investment scheme has a full beneficial interest in such securities. A member would only have a beneficial interest in particular scheme property if they have rights against the responsible entity that are closely related to the property. This is unlikely for a scheme in the nature of an equity fund. Such a beneficial interest may not be ‘full’. Even if the members did have a full beneficial interest, their interests could not be aggregated for the purposes of s664A(1) unless they were related bodies corporate. RG 10.97 We may give relief to treat a registered scheme as a single entity that owns the securities, so that the registered scheme can meet the 90% full beneficial interest test in s664A(1) and the scheme can utilise general compulsory acquisition. No aggregation with other holdings RG 10.98 When we give relief for a registered scheme, normally it will be a term of our relief that the responsible entity cannot meet the 90% full beneficial interest test in s664A by aggregating its interest in securities that are property of a scheme with: (a) securities held by related bodies corporate of the responsible entity; and (b) the responsible entity’s interest in securities that are scheme property of another scheme. RG 10.99 Under s664A(1) and (2), a person’s full beneficial interests can be aggregated with those of their related bodies corporate for the purposes of meeting the 90% full beneficial interest test. This concept of group ownership of the securities is not appropriate for a registered scheme. The responsible entity has a legal obligation to exercise rights and benefits attaching to securities that are scheme property for the benefit of members of the scheme, rather than the responsible entity’s corporate members. Similarly, it may be inappropriate to aggregate holdings that are scheme property of different schemes with a common responsible entity. ASIC relief: Mortgaged or charged holdings RG 10.100 A person who gives a mortgage, charge or other security interest may not be able to meet the 90% full beneficial interest test in s664A. Some commentators have suggested that a beneficial interest would not be ‘full’ if any other person has a vested or contingent beneficial interest in the securities. On this view, a holder who gave a mortgage, charge or other security interest would not have a full beneficial interest in the securities. There is an alternative view that the problem arises for equitable mortgages only. RG 10.101 For certainty, we may give relief so that s664A applies where the overwhelming owner has given any mortgage, charge or other security interest over the holding. Our relief for an owner that has given a mortgage will require that: Page 25 REGULATORY GUIDE 10: Compulsory acquisitions and buyouts © Australian Securities and Investments Commission July 2026 Page 25 (a) the financier took or acquired the mortgage in the ordinary course of their business of providing financial accommodation and on ordinary commercial terms; and (b) the financier is not an associate of the owner. In these circumstances it is clearer that the overwhelming owner who gave the mortgage remains owner of the holding in the commercial sense. These requirements are the same as