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Filters:   Shareholder Approval,Voting Rights; All
 
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Frequently Asked Questions
  What factors need to be considered in determining whether shareholder approval is required for a transaction involving the acquisition of stock or assets of another company?
Identification Number 180

Listing Rule 5635(a) describes when shareholder approval is required for a transaction involving the acquisition of stock or assets of another company. Among the factors considered in determining whether shareholder approval is required are the number of shares to be issued, including any shares issuable pursuant to an earn-out or similar provision, the voting power of any shares to be issued, and whether any director, officer or substantial shareholder has an interest in the company or assets to be acquired or the consideration to be paid in the transaction.

In addition, please note the following:

    • Even if shareholder approval is not required under Listing Rule 5635(a), shareholder approval may still be required if the transaction will result in a change of control under Listing Rule 5635(b); and
    • There is no pricing test when determining if shareholder approval is required for securities issued in connection with an acquisition. Thus, shares issued in a private placement priced above the Minimum Price may require shareholder approval if the proceeds are used to fund an acquisition.  

Publication Date*: 10/10/2018 Mailto Link Identification Number: 180
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