Part 17A company’s share capital
Chapter 6Public companies: independent valuation of non-cash consideration
Non-cash consideration for shares
594Exception to valuation requirement: arrangement with another company
1
Section 593 (valuation of non-cash consideration) does not apply to the allotment of shares by a company (“company A”) in connection with an arrangement to which this section applies.
2
This section applies to an arrangement for the allotment of shares in company A on terms that the whole or part of the consideration for the shares allotted is to be provided by—
a
the transfer to that company, or
b
the cancellation,
of all or some of the shares, or of all or some of the shares of a particular class, in another company (“company B”).
3
It is immaterial whether the arrangement provides for the issue to company A of shares, or shares of any particular class, in company B.
4
This section applies to an arrangement only if under the arrangement it is open to all the holders of the shares in company B (or, where the arrangement applies only to shares of a particular class, to all the holders of shares of that class) to take part in the arrangement.
5
In determining whether that is the case, the following shall be disregarded—
a
shares held by or by a nominee of company A;
b
shares held by or by a nominee of a company which is—
i
the holding company, or a subsidiary, of company A, or
ii
a subsidiary of such a holding company;
c
shares held as treasury shares by company B.
6
In this section—
a
“arrangement” means any agreement, scheme or arrangement (including an arrangement sanctioned in accordance with—
i
Part 26 (arrangements and reconstructions), or
ii
section 110 of the Insolvency Act 1986 (c. 45) or Article 96 of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)) (liquidator in winding up accepting shares as consideration for sale of company property)), and
b
“company”, except in reference to company A, includes any body corporate.