ASIC Corporations (Minimum Bid Price) Instrument 2026/101

Explanatory Statement

ASIC Corporations (Minimum Bid Price) Instrument 2026/101

This is the Explanatory Statement for ASIC Corporations (Minimum Bid Price) Instrument 2026/101 (Instrument).

The Explanatory Statement is approved by the Australian Securities and Investments Commission (ASIC).

Summary

1.              The minimum bid price principle is a component of the 'equality principle' that is pivotal to the takeovers regimes set out in Chapter 6 of the Corporations Act 2001 (Act). The equality principle holds that all the holders of a class of securities must have a reasonable and equal opportunity to participate in any benefits through a proposal under which a person would acquire a substantial interest in a company.
2.              Section 621(3) of the Act provides that consideration offered for securities in the bid class under a takeover bid must equal or exceed the maximum consideration that the bidder or an associate provided, or agreed to provide, for a security in the bid class under any purchase or agreement during the 4 months before the date of the bid.  While Section 621(3) does not require a bidder to offer bid consideration of the same kind as pre-bid purchase consideration, it does require that the bid consideration be of at least equal value.
3.              Section 621(3) does not account for certain technical and practical difficulties that may arise in the four months prior to making a bid, for example price differences arising from the declaration of dividends or share splits.
4.              The Instrument modifies section 621 to:
   1.           permit a bidder to offer less than the minimum bid price where there is a decrease in the value of the target’s quoted securities due to a share split or dividend; and
   2.           permit a bidder to offer less than the minimum bid price to certain bodies corporate in the bidder’s wholly-owned group, and certain nominees and bare trustees for those bodies; and
   3.           where the consideration offered includes quoted securities, permit a bidder to ascertain their value at a time chosen by the bidder within 5 business days before the date of the bid.
5.              Various requirements apply in relation to the permitted actions.
6.              The Instrument provides relief, on largely the same terms as ASIC Corporations (Minimum Bid Price) Instrument 2015/1068 which was scheduled to expire under the Legislation Act 2003 on 1 April 2026 (Sunsetting Instrument).

Purpose of the instrument

1.              The drafting of s621 gives rise to certain technical and practical difficulties in the takeovers process where the value of quoted securities offered under the bid decreases between the day the bidder lodged its statement with ASIC and the first day of the offer.
2.              Without relief, the bidder would be required to increase its bid consideration and update its bidder’s statement or risk contravention of s621(3).  This would include in circumstances (such as a share split or the payment of a dividend) where there was no impact on the underlying value of the scrip.
3.              The legislation similarly applies the equality principle to arrangements between entities which are part of the same corporate group, even where this may inhibit the group's flexibility to make takeover bids.
4.          In each case, without relief, there are unnecessary compliance costs imposed on business and the risk of inadvertent technical breaches of the law.

Consultation

1.          ASIC determined that the relief in the Sunsetting Instrument was operating effectively and efficiently and continues to form a necessary and useful part of the legislative framework.
2.          On 24 November 2025, ASIC published CS 36 Proposed remake of relief for fundraising and mergers and acquisitions (CS 36).
3.          On 24 November 2025, ASIC also published an accompanying news item ASIC proposes to remake relief for fundraising and mergers and acquisitions. 
4.          ASIC brought CS 36 to the attention of its external stakeholders through the Corporate Finance Update published November 2025.
5.          ASIC did not receive any submissions about the Instrument in response to CS 36 (which closed 19 December 2025).

Operation of the instrument

1.          The Instrument commences on the later of:
   1.           the day after it is registered on the Federal Register of Legislation; and
   2.           1 April 2026.
2.          The drafting of s621 of the Act gives rise to certain technical and practical difficulties in the takeovers process. The Instrument inserts into the Act subsections 621(3A), (3B), (4A) and 621(4B), which together operate to resolve these practical difficulties in circumstances where:
   1.           there is a decrease in the value of the target's securities due to a share split under s254H or a dividend is declared where the ex-date is after the date of the purchase or agreement and at or before the date of the bid (s621(3A));
   2.           consideration below the bid consideration is offered to:
      1.             a body corporate in the same wholly-owned group as the bidder; or
      2.          nominees and bare trustees of bid class securities for the bidder or a body mentioned in (i) (s621(3B)); or
   3.           a bidder makes a pre-bid purchase for cash and then follows this with a takeover offer under which the consideration offered comprises quoted securities, and the value of the quoted securities declines between the date of lodgement of the bid with ASIC and the opening of the offer (s621(4A)).
3.          The Instrument also inserts into the Act subsection 621(4B), which extends the operation of the instrument to cover quoted securities on approved foreign markets.
4.          Further regulatory guidance is provided in Regulatory Guide 9 Takeover bids (RG 9).
5.          Finally, the Instrument repeals the Sunsetting Instrument (rather than leave it to expire/sunset) to avoid any doubt that it no longer continues in force

Legislative instrument and primary legislation 

1.          The subject matter and policy implemented by this instrument is more appropriate for a legislative instrument rather than primary legislation because the Instrument contains technical detail which would otherwise introduce unnecessary complexity to the primary legislation.
2.          It will be a matter for the Government and for Parliament as to whether the Act or Regulations may be amended in future to include the relief in the Instrument.

Duration of the instrument

1.          The Instrument will expire after 5 years.

1.          This allows sufficient time for the Government and for Parliament to determine whether to amend the Act or Regulations to include the relief.

Legislative authority

1.          ASIC makes this Instrument under subsection 655A(1) of the Act.
2.          Subsection 655A(1) provides that ASIC may:

1.           exempt a person from a provision of Chapter 6; or

1.           declare that Chapter 6 applies to a person as if specified provisions were omitted, modified or varied as specified in the declaration.

1.          Subsection 655A(2) provides that in deciding whether to give the exemption or declaration, ASIC must consider the purposes of Ch 6 set out in section 602.  
2.          Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power is to be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend or vary any such instrument.
3.          ASIC has considered section 602 and concluded that the declarations in this Instrument are:
   1.           not inconsistent with, and do not undermine, the purposes of Ch 6; and
   2.           appropriate. 
4.          This Instrument is disallowable under section 42 of the Legislation Act 2003.

Statement of Compatibility with Human Rights 

1.          The Explanatory Statement for a disallowable legislative instrument must contain a Statement of Compatibility with Human Rights under subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011. A Statement of Compatibility with Human Rights is in the Attachment.

Attachment

Statement of Compatibility with Human Rights

This Statement of Compatibility with Human Rights is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.  

ASIC Corporations (Minimum Bid Price) Instrument 2026/101

Overview

1.  This instrument modifies section 621 of the Corporations Act 2001 to:

(a) permit a bidder to offer less than the minimum bid price where there is a decrease in the value of the target’s quoted securities due to a share split or dividend; and

(b) permit a bidder to offer less than the minimum bid price to certain bodies corporate in the bidder’s wholly-owned group, and certain nominees and bare trustees for those bodies; and

(c) where the consideration offered includes quoted securities, permit a bidder to ascertain their value at a time chosen by the bidder within 5 business days before the date of the bid.

2.  Various requirements apply in relation to the permitted actions.

Assessment of human rights implications

3. This instrument does not engage any of the applicable rights or freedoms. 

Conclusion

4. This instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.