Acquiring Own Shares
Companies Act
Acquisition of own shares and certain acquisitions by subsidiaries
Additional (general) provisions relating to acquisition by PLCs of own shares
1071. (1) In addition to the requirements set out in sections 105 and 106 —
(a) an acquisition by a PLC of its own shares, in so far as the consideration therefor is profits available for distribution, shall be in compliance with the restriction on the distribution of assets specified in section 1082 ; and
(b) a PLC shall not purchase any of its shares if as a result of such purchase the nominal value of its issued share capital which is not redeemable would be less than one-tenth of the nominal value of the total issued share capital of the PLC.
(2) With regard to the purchase by a PLC of its own shares, the requirements of sections 105 and 106 and the preceding subsection shall have effect without prejudice to—
(a) the principle of equal treatment of all shareholders who are in the same position; and
(b) Chapter 2 of Part 23 and regulations thereunder.
“Market purchase”, “overseas market purchase” and “off-market purchase”
1072. (1) For the purposes of sections 1073 to 1081 , a purchase by a PLC of its own shares is—
(a) an “off-market purchase” if the shares are purchased either—
(i) otherwise than on a securities market; or
(ii) on a securities market but are not subject to a marketing arrangement on that market;
(b) a “market purchase” if the shares are purchased on a securities market within the State and are subject to a marketing arrangement.
(2) For the purposes of sections 1073 to 1081 , a purchase by a PLC that issues shares, or by a subsidiary of that PLC, of the first-mentioned company’s shares, is an “overseas market purchase” if the shares—
(a) are purchased on—
(i) a regulated market; or
(ii) another market recognised for the purposes of this section;
being, in either case, a market outside the State; and
(b) are subject to a marketing arrangement.
(3) For the purposes of subsections (1) and (2), a PLC’s shares are subject to a marketing arrangement on a securities market or, in the case of subsection (2)(a), a regulated market or another market recognised for the purposes of this section, if either—
(a) they are listed or admitted to trading on that market; or
(b) the PLC has been afforded facilities for dealings in those shares to take place on that market without prior permission for individual transactions from the—
(i) authorised market operator concerned; or
(ii) in the case of subsection (2)(a), the authority in the state concerned that governs the market;
and without limit as to the time during which those facilities are to be available.
(4) Sections 1073 to 1081 shall apply to American depositary receipts as those sections apply to shares.
(5) In this section—
“American depositary receipt” means an instrument—
(a) which acknowledges—
(i) that a depositary or a nominee acting on his or her behalf, holds stocks or marketable securities which are dealt in and quoted on a market recognised for the purposes of this section; and
(ii) that the holder of the instrument has rights in or in relation to such stocks or marketable securities, including the right to receive such stocks or marketable securities from the depositary or his or her nominee;
and
(b) which—
(i) is dealt in and quoted on a market recognised for the purposes of this section, being a market which is situated in the United States of America; or
(ii) represents stocks or marketable securities which are so dealt in and quoted;
“recognised for the purposes of this section”, in relation to a market, means recognised by order made by the Minister (and such an order may provide for different markets to be recognised for the purposes of different provisions of this section);
“securities market” means—
(a) a regulated market;
(b) a multilateral trading facility (within the meaning of Article 4(1), point (15) of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004); or
(c) such other securities market as may be prescribed.
Authority for PLC’s purchase of own shares
1073. Neither paragraph (a) or (b) of section 105 (4) shall be regarded as conferring authority for a purchase by a PLC of its own shares and accordingly such purchase shall be required to have the authority of—
(a) in a case falling within section 1074 — an ordinary resolution of the PLC;
(b) in a case falling within section 1075 — a special resolution of the PLC.
Market purchase of own shares
1074. (1) A PLC shall not make a market purchase or overseas market purchase of its own shares unless the purchase has first been authorised by the PLC by ordinary resolution and any such authority may be varied, revoked or from time to time renewed by the PLC by ordinary resolution.
(2) Subsection (1) shall not be read as requiring any particular contract for the market purchase or overseas market purchase of shares to be authorised by the PLC in general meeting and, for the purposes of this Part, where a market purchase or overseas market purchase of shares has been authorised in accordance with this section any contract entered into pursuant to that authority in respect of such a purchase shall be deemed also to be so authorised.
(3) Section 198 shall apply to a resolution under subsection (1). (4) The authority granted under subsection (1) shall—
(a) specify the maximum number of shares authorised to be acquired;
(b) determine both the maximum and minimum prices which may be paid for the shares, either by—
(i) specifying a particular sum; or
(ii) providing a basis or formula for calculating the amount of the price in question without reference to any person’s discretion or opinion;
(c) specify the date on which the authority is to expire which shall not be later than 5 years after the date on which the ordinary resolution granting the authority is passed.
(5) A PLC may make a purchase referred to in subsection (1) after the expiry of any time limit imposed by virtue of subsection (4)(c) in any case where the contract of purchase was concluded before the authority conferred on it expired and the terms of that authority permit the PLC to make a contract of purchase which would or might be executed wholly or partly after the authority expired.
Off-market purchase of own shares
1075. (1) A PLC shall not make an off-market purchase of its own shares otherwise than in pursuance of a contract authorised in advance by a special resolution of the PLC.
(2) Any such authority may be varied, revoked or from time to time renewed by the PLC by special resolution.
(3) Section 105 (5), (7), (8) and (10) to (12) apply to a special resolution referred to in subsection (1) or (2) as they apply to a special resolution of a private company limited by shares authorising the acquisition by it of its own shares but subsections (4) and (5) of this section supplement those provisions.
(4) Any authority granted under subsection (1) or (2) shall specify the date on which the authority is to expire which shall not be later than 18 months after the date on which the special resolution granting the authority is passed.
(5) A PLC may make a purchase referred to in subsection (1) after the expiry of any time limit imposed by virtue of subsection (4) in any case where the contract of purchase was concluded before the authority conferred on it expired and the terms of that authority permit the PLC to make a contract of purchase which would or might be executed wholly or partly after the authority expired.
Assignment or release of company’s right to purchase own shares
1076. (1) Any purported assignment of the rights of a PLC under any contract authorised under section 1074 or 1075 shall be void.
(2) Nothing in subsection (1) shall prevent a PLC from releasing its right under any contract authorised under section 1074 or 1075 provided that the release has been authorised by—
(a) in the case of section 1074 — an ordinary resolution of the PLC;
(b) in the case of section 1075 — a special resolution of the PLC,
before the release is entered into, and any such purported release by a PLC which has not been authorised in that manner shall be void.
(3) Subsections (5), (7) and (8) of section 105 shall apply to a resolution under subsection (2) and, for the purposes of this subsection, subsection (8) of section 105 shall have effect as if the references in it to the contract of purchase were references to the release concerned.
Relationship of certain acquisition provisions to those in Part 3
1077. (1) For the avoidance of doubt, the provisions of Part 3 that make consequential or supplementary provision in respect of an acquisition by a company under section 105 of its own shares (and, in particular, the provisions referred to in subsection (2)) apply to an acquisition by a PLC of its own shares referred to in sections 1071 to 1076 , and the authorisation of any contract thereunder, unless a contrary intention is indicated in one of those latter sections.
(2) The particular provisions mentioned in subsection (1) are those that contain reference, however expressed, to a contract authorised under section 105 .
Off-market re-allotment of treasury shares by PLC
1078. (1) The maximum and minimum prices at which treasury shares may be re-allotted off-market (the “re-allotment price range”) by a PLC shall be determined in advance by the PLC in general meeting in accordance with subsections (2) to (4) and such determination may fix different maximum and minimum prices for different shares.
(2) Where the treasury shares to be re-allotted are derived in whole or in part from shares purchased by the PLC in accordance with the provisions of Part 3 (as applied by this Part) the re-allotment price range of the whole or such part (as the case may be) of those shares shall be determined by special resolution of the PLC passed at the meeting at which the resolution authorising that purchase has been passed and such determination shall, for the purposes of this section, remain effective with respect to those shares for the requisite period.
(3) Where the treasury shares to be re-allotted are derived in whole or in part from shares redeemed by the PLC in accordance with the provisions of Part 3 (as applied by this Part) the re-allotment price range of the whole or such part (as the case may be) of those shares shall be determined by special resolution of the PLC passed before any contract for the re-allotment of those shares is entered into and such determination shall, for the purposes of this section, remain effective with respect to those shares for the requisite period.
(4) The PLC may from time to time by special resolution vary or renew a determination of re-allotment price range under subsection (2) or (3) with respect to particular treasury shares before any contract for re-allotment of those shares is entered into and any such variation or renewal shall, for the purposes of this section, remain effective as a determination of the re-allotment price range of those shares for the requisite period.
(5) A re-allotment by a PLC of treasury shares in contravention of subsection (2), (3) or (4) shall be unlawful.
(6) For the purposes of determining in this section whether treasury shares are re-allotted off-market, the provisions of section 1072 shall have effect with the substitution of the words “re-allotment”, “off-market re-allotment” and “re-allotted” respectively for the words “purchase”, “off-market purchase” and “purchased” in subsection (1)(a) of that section.
(7) In this section, the “requisite period” means the period of 18 months after the date of the passing of the resolution determining the re-allotment price range or varying or renewing (as the case may be) such determination or such lesser period of time as the resolution may specify.
Return to be made to Registrar under section 116 (1)
1079. (1) In its application to shares, the subject of an overseas market purchase by a PLC, section 116 (1) shall apply as if “3 days” were substituted for “30 days”.
(2) In addition to the requirements of section 116 , the return required to be made by a PLC under that section shall state—
(a) the aggregate amount paid by the PLC for the shares; and
(b) the maximum and minimum prices paid in respect of each class purchased.
(3) Where subsection (2) applies, then the following subsection shall be substituted for subsection (2) of section 116 :
“(2) Particulars of shares delivered to the company on different dates and under different contracts may be included in a single return to the Registrar, and in such a case the amount required to be stated under section 1079 (2)(a) shall be the aggregate amount paid by the company for all the shares to which the return relates.”.
Duty of PLC to publish particulars of overseas market purchase
1080. (1) Whenever shares for which dealing facilities are provided on a regulated market or other market referred to in section 1072 (2)(a) are the subject of an overseas market purchase either by the PLC which issued the shares or by a company which is that PLC’s subsidiary, the PLC which issued the shares has the following duty.
(2) That duty of the PLC is to publish—
(a) on its website; or
(b) in any other prescribed manner;
for a continuous period of not less than 28 days beginning on the day that next follows the overseas market purchase concerned and is a day on which the market concerned is open for business the following information for total purchases on the market concerned on each such day—
(i) the date, in the place outside the State where the market concerned is located, of the overseas market purchase;
(ii) the purchase price at which the shares were purchased, or the highest such price and lowest such price paid by the PLC or the subsidiary;
(iii) the number of shares which were purchased; and
(iv) the market on which the shares were purchased.
(3) If a PLC fails to fulfil its duty under subsection (1), the PLC and any officer of it who is in default shall be guilty of a category 3 offence.
Duty of PLC to notify authorised market operator
1081. (1) Whenever shares for which dealing facilities are provided on a regulated market have been purchased, either by the PLC which issued the shares or by a company which is that PLC’s subsidiary, then, save where the purchase was an overseas market purchase, the PLC whose shares have been purchased has the following duty.
(2) That duty of the PLC is to notify the authorised market operator concerned of the fact of that purchase; that operator may publish, in such manner as it may determine, any information received by it under this subsection.
(3) That duty shall be fulfilled before the end of the day after that on which the purchase concerned has taken place.
(4) If a PLC fails to fulfil its duty under subsection (1), the PLC and any officer of it who is in default shall be guilty of a category 3 offence.
The text in italics on this page is sourced from the Irish Statute Book and is re-published under the Licence for Re-Use of Public Sector Information made pursuant to Directive 2003/98/EC Directive 2013/37/EU of the European Parliament and of the Council on the re-use of public sector information transposed into Irish law by the European Communities (Re-Use of Public Sector Information) Regulations 2005 to 2015.