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LR 10.5 Class 1 requirements

Notification and shareholder approval

LR 10.5.1R

A listed company must, in relation to a class 1 transaction:

  1. (1)

    comply with the requirements of LR 10.4 (Class 2 requirements) for the transaction;

  2. (2)

    send an explanatory circular to its shareholders and obtain their prior approval in a general meeting for the transaction; and

  3. (3)

    ensure that any agreement effecting the transaction is conditional on that approval being obtained.

Note: LR 13 sets out requirements for the content and approval of class 1 circulars.

Material change to terms of transaction1

LR 10.5.2R

1If, after obtaining shareholder approval but 2before the completion of a class 1 transaction or a reverse takeover, there is a material change to the terms of the transaction, the listed company must comply again separately with LR 10.5.1 R in relation to the transaction.

2
LR 10.5.3G

1The FCA would (amongst other things) generally consider an increase of 10% or more in the consideration payable to be a material change to the terms of the transaction.

Supplementary circulars

LR 10.5.4R
  1. (1)

    2If a listed company becomes aware of a matter described in (2) after the publication of a circular that seeks shareholder approval for a transaction expressly requiring a vote by the listing rules, but before the date of a general meeting, it must, as soon as practicable:

    1. (a)

      advise the FCA of the matters of which it has become aware; and

    2. (b)

      send a supplementary circular to holders of its listed equity shares providing an explanation of the matters referred to in (2).

  2. (2)

    The matters referred to in (1) are

    1. (a)

      a material change affecting any matter the listed company is required to have disclosed in a circular; or

    2. (b)

      a material new matter which the listed company would have been required to disclose in the circular if it had arisen at the time of its publication.

  3. (3)

    The listed company must have regard to LR 13.3.1R (3) when considering the materiality of any change or new matter under LR 10.5.4R (2).

LR 10.5.5G

2LR 13 applies in relation to a supplementary circular. It may be necessary to adjourn a convened shareholder meeting if a supplementary circular cannot be sent to holders of listed equity shares at least 7 days prior to the convened shareholder meeting as required by LR 13.1.9 R.