Clifford Chance

What’s Market? Major Shareholder Involvement in Public Control Transactions

8 July 2025

With the continued interest of financial investors in acquiring control of ASX-listed entities and the competition for control that can emerge when a target entity (Target) is “in play”, it has never been more important for potential bidders to maximise the prospects of success for their transaction.

If a Target has a shareholder that holds more than 20% of the voting securities in that listed entity (Major Shareholder), securing the support of that Major Shareholder will be key to the prospects of successfully implementing a control transaction in respect of that Target. However, in practice, it can prove challenging to appropriately and lawfully secure such support as issues connected to the 20% Rule (as defined below), association, class creation and minority shareholder protection need to be addressed.

As at the publication date, approximately 20% of ASX-listed entities have at least one shareholder that has voting power of between 20% and 50% in that entity. It is therefore important for market participants to understand how they can engage with Major Shareholders without inadvertently falling foul of the prohibitions and disclosure obligations imposed by Chapter 6 of the Corporations Act 2001 (Corporations Act).

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