A Matter of Equity: ASX-Listed Companies Funding Conditional Acquisitions Through Their Shareholders

In Australia, a clear procedure does not exist for ASX-listed companies to obtain financing from their existing shareholder base for conditional acquisitions. Generally, a company will need to ensure sufficient funding is available for an acquisition that is conditional or uncertain when it is agreed and announced. Issues can arise when these entities seek to raise funds from their existing shareholders for the purpose of the conditional acquisition, including a lack of clarity regarding what to do with funds raised should the acquisition not proceed.

This Jones Day White Paper reviews the methods of shareholder funding of conditional acquisitions used recently by Australian listed companies, identifies the various issues that arise under each of those methods and examines whether the Canadian approach to shareholder funding of these acquisitions might work in Australia.

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