Building Societies (Amendment) Act 2006

Principal Act amended by inserting new section (section 101C).

22.— The Principal Act is amended by inserting the following after section 101B (inserted by the Housing (Miscellaneous Provisions) Act 2002 ):

“Disposal of successor company.

101C.— (1) In this section—

‘ acquirer ’ means a person or persons making or proposing to make an acquisition pursuant to an acquisition agreement and an acquisition conversion scheme;

‘ acquisition ’ includes purchase, allotment, transfer or any other means by which an acquirer may take ownership of shares in a successor company;

‘ acquisition agreement ’ means in relation to a building society to which subsection (2) applies, and a conversion scheme, any agreement entered into by that society expressed to be conditional on conversion, which provides for the direct or indirect acquisition by an acquirer of shares in the successor company, provided that after the acquisition the aggregate proportion of shares or voting rights attaching to shares in the successor company held or exercisable by, or by nominees for, that acquirer would exceed 50 per cent;

‘ acquisition conversion scheme ’ means a conversion scheme which is expressed to be for the purpose of implementing an acquisition.

(2) A building society to which section 101(8) applies whose board of directors is proposing a conversion scheme under section 101 the terms of which specify matters referred to in section 101(7), may, subject to the provisions of this section, enter into an acquisition agreement and convert itself into a company for the purposes of implementing an acquisition and this Part and this section shall apply to such a building society for those purposes.

(3) (a) Notwithstanding section 101(4), where the Central Bank receives less than 6 months notice of the date on which it is intended that the conversion resolution be moved at a general meeting of a society or voted on in a postal ballot, it may, where the conditions specified in paragraph (b) are complied with, consent to a conversion resolution being moved at a general meeting of the society or voted on in the postal ballot.

(b) The conditions referred to in paragraph (a) are that—

(i) the society has applied in writing to the Central Bank for its consent,

(ii) the society has otherwise complied with section 101(4), and

(iii) the Central Bank considers that it is appropriate to give its consent.

(4) An acquisition conversion scheme shall in addition to the matters specified in section 101(3)—

(a) state the identity of the acquirer,

(b) specify the consideration (or, if applicable, the basis of calculation of the consideration) to be paid or provided by the acquirer for the acquisition of shares in the successor company, including such payments or other consideration to be received by members of the society and the proposed settlement arrangements,

(c) specify all conditions to which the acquisition is subject, including those conditions which may be waived by the society or the acquirer as the case may be,

(d) specify the rights of members of the society with respect to the successor company in the event that the acquisition takes place,

(e) specify the position of the society and the rights and position of members of the society, in the event that the acquisition does not take place,

(f) contain a copy of the acquisition agreement, and

(g) state that section 102 shall not apply to the successor company.

(5) The statement required by section 103(1), in addition to the matters specified in section 103(2), shall—

(a) state the reasons for the proposed acquisition,

(b) state the interests (if any) of the officers of the society in the acquisition,

(c) state the settlement arrangements in respect of the payments or other consideration to be paid or provided under the acquisition agreement,

(d) state that a copy of the acquisition agreement may be obtained free of charge by any member at every place of business of the society at any time during normal business hours, and

(e) summarise the following in sufficient detail to enable persons entitled to vote to decide how to vote on the conversion resolution:

(i) the matters which under subsection (4) are required to be referred to in the acquisition conversion scheme; and

(ii) the acquisition agreement which under subsection (4)(f) is required to be annexed to the acquisition conversion scheme.

(6) The Central Bank may carry out such inquiries and obtain such information as it considers necessary to enable it to consider an acquisition conversion scheme.

(7) A person who wilfully or knowingly obstructs or prevents inquiries made by the Central Bank in performing any of its functions under this section, or knowingly or recklessly provides false or misleading information in relation to those inquiries, is guilty of an offence.

(8) (a) Without prejudice to section 101(6), the terms of an acquisition conversion scheme shall restrict any rights conferred on members of the society who are such members by virtue of holding shares in the society entitling them to receive payments or other consideration from the acquirer or the society as a consequence of the acquisition, in the case of those persons who became members of the society after 21 December 1988, to those members who held shares in the society throughout the period of 2 years which ended with the day on which notice is given to members of the conversion resolution.

(b) Sections 101A and 101B apply where an acquisition conversion scheme confers rights on members of a building society to receive payments or other consideration from the acquirer or the society as a consequence of the acquisition.

(9) (a) Notwithstanding section 106(1), the documents referred to therein shall not be delivered by a society to the registrar of companies until the requirements specified in paragraph (b) are met.

(b) The requirements referred to in paragraph (a) are that—

(i) all conditions (other than the condition requiring the registration of the society as a company under section 106) to which the acquisition is subject have been complied with or waived as the case may be,

(ii) the society and acquirer have confirmed in writing to the Central Bank that such compliance or waiver, as appropriate, has taken place, and

(iii) the Central Bank has, upon receipt of each of the confirmations referred to in subparagraph (ii), forwarded a copy thereof to the registrar of companies.

(c) The requirements referred to in paragraph (b)(ii) and (iii) shall be met no later than the date on which the documents referred to in section 106(1) are delivered to the registrar of companies.

(10) Where an acquisition conversion scheme specifies conditions which must be complied with or waived, as the case may be, before the acquisition proceeds then the acquisition conversion scheme is terminated unless the documents referred to in section 106(1) are delivered to the registrar of companies not more than 6 months after—

(a) the date which is one month after registration of the scheme under section 104(5), or

(b) where a petition for the cancellation of a conversion scheme is made to the Court under section 105, the date on which the Court makes an order under subsection (5) of that section or an appeal from any order made under that subsection is determined,

whichever is the later.

(11) Where the acquisition conversion scheme is terminated under subsection (10), the society shall so notify the Central Bank and the Central Bank shall, on receipt of the notification, cancel the registration of the scheme under section 104(5) and rescind the registration certificate issued under that subsection.

(12) Where an acquisition conversion scheme proceeds, section 106(6) shall apply to the registration of a society as a company with the following and any other necessary modifications:

(a) the acquirer or such nominees of the acquirer as shall be specified in the relevant acquisition agreement shall, in accordance with the terms of that acquisition conversion scheme, be members of the successor company; and

(b) the shares in the capital of the successor company to which the acquirer is entitled in accordance with that acquisition conversion scheme shall be taken to be acquired by the acquirer.”.