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Company Law Reform Bill [HL]

moved Amendment No. A163A:"Page 310, line 43, at end insert—" ““(   )   Any provision of the company’s articles of association to which this section applies is invalid in so far as its places any restriction— (a)   on the transfer to the offeror, or at his discretion to another person, of shares in the company during the offer period; (b)   on the transfer to any person of shares in the company at a time during the offer period when the offeror holds shares amounting to not less than 75% of the capital carrying voting rights in the company; (c)   on the appointment or removal of directors of the company at a time during the offer period when the offeror holds shares amounting to not less than 75% of the capital carrying voting rights; (d)   on rights to vote at a general meeting of the company that decides whether to take any action which might result in frustration of the bid; (e)   on rights to vote at a general meeting of the company that— (i)   is the first such meeting to be held after the end of the offer period, and (ii)   is held at a time when the offeror holds shares amounting to not less than 75% of the capital carrying voting rights.”” The noble Lord said: We may have chewed this issue in our earlier discussions. Amendments Nos. A163A and A163B concern the clause’s effect on contractual restrictions. We have already discussed the provisions of Article 11 of the takeovers directive. This clause deals with the effect on contractual restrictions. There appears to be no provision, other than the second condition in Clause 641(3), which was the subject of the earlier amendment of the noble Lord, Lord Sharman, to deal with the effect of opting in on a company’s articles of association. This amendment would ensure that this anomaly is addressed. I have no doubt that, even if the Government were minded to accept it, the parliamentary draftsmen would find the drafting inadequate. But we should at least discuss the anomaly, even if the way in which it is to be corrected can be more felicitously phrased. I beg to move.