Can you stop a takeover as a minority shareholder?

It is no mean feat to stop a takeover from going through, especially if you are a minority shareholder. It may seem impossible, but it isn’t even if it is difficult.

To understand how it is possible, an investor needs to understand that a takeover is a process rather than event – yes, there is an outcome but there are steps that lead up to it. And each individual stage is different.

The early stage: when the board is considering a proposal

The first phase is invisible to the market. A bidder approaches the board with a non‑binding indicative offer, and the board evaluates it privately. At this point, shareholders cannot vote, cannot formally intervene, and cannot trigger regulatory processes. Yet they still have influence.

Shareholder relations teams record feedback, especially when it relates to takeover interest. Often companies will disclose an offer and say they are considering it. The clue is that they’ll often say they’ll make the decision,’ in the best interests of shareholders’.

At this point, if you oppose a sale, you can write to the company stating that you believe the business is undervalued, and that you would vote against a scheme or refuse to accept a bid. Boards are acutely sensitive to shareholder sentiment during early discussions. If long‑term holders express resistance, boards may negotiate harder or reject the proposal outright.

Moreover, you can engage with proxy advisers such as Ownership Matters, CGI Glass Lewis, and ISS. These firms influence institutional votes, and they consider shareholder arguments when forming recommendations. If you oppose the deal, you can write to them explaining why the offer undervalues the company or why the bidder’s assumptions are flawed.

You can also communicate with other shareholders. Australian law allows shareholders to discuss views with each other, provided they do not form an “association” that triggers takeover rules. Expressing your opinion publicly (through investor forums, shareholder groups, or media commentary) is permitted. You cannot coordinate voting in a binding way, but you can influence sentiment. In early phases, this is soft power, but it is power nonetheless.

The recommendation stage: when your formal rights begin

Once the board recommends the takeover, the process becomes structured. The takeover can proceed via a scheme of arrangement or a traditional takeover bid. Your rights differ depending on the method. If it is a ‘scheme of arrangement’, minority shareholders have real power
given they are court‑supervised and require 75% of all votes cast and 50% of shareholders by number to approve. It is both, not one of the other.

Your vote counts directly toward the 75% threshold. If enough shareholders oppose, the scheme fails. This is the most powerful moment for minority shareholders: a scheme can be blocked even if the bidder owns a large stake.

You can also speak at the scheme meeting. Any shareholder can raise valuation concerns, challenge assumptions in the independent expert’s report, or question the board’s rationale. Courts consider the tenor of shareholder sentiment at the second hearing.

You can challenge the scheme in court. This is rare, but possible. Shareholders can argue that the scheme is not fair or reasonable. Courts rarely block schemes, but they listen – we’ll show some examples later in this article. If the scheme fails, the takeover dies.

But in a traditional takeover bid, shareholders individually choose whether to accept. If you oppose the takeover, you can refuse to accept the bid. You cannot be forced to sell unless the bidder reaches 90%. You can encourage other shareholders not to accept. Again, you cannot form an association, but you can publicly express your view.

You can monitor bid conditions. If the bidder fails to meet conditions (regulatory approvals, minimum acceptance levels) the bid may lapse. Your influence is more diffuse than in a scheme, but still meaningful.

The 90% threshold: where resistance becomes limited

Once the bidder reaches 90% ownership and 90% of voting power, they can compulsorily acquire the remaining shares at the same price offered to everyone else. This is the critical moment.

If you oppose the takeover, your options narrow dramatically.

You can object to the compulsory acquisition. You can lodge a formal objection with ASIC. ASIC will review whether the process is fair, but it rarely blocks compulsory acquisition unless there is evidence of unfairness or procedural defects.

You can argue that the price is not fair value. You can submit a valuation objection. ASIC may require an independent expert to review the price. This is uncommon, but it has occurred in cases where minority shareholders raised credible valuation concerns.

You can seek court review. You can challenge the acquisition in court, arguing that the price is not fair. Courts generally defer to the bidder’s offer price unless there is clear evidence of manipulation or unfair dealing.

However, once 90% is reached, you cannot stop the takeover. You can only challenge the fairness of the price. And once the bidder reaches 100%, the company is delisted and you are paid out compulsorily. There is no further recourse. But by this point, you can just console yourself with the cash received.

Case studies of minority shareholders successfully resisted takeovers

The best way to understand minority power is through real examples. There are modern ASX cases illustrate how minority shareholders have disrupted or reshaped takeover attempts.

The first is Energy Resources of Australia (ERA) and we think it is the clearest example of minority shareholders using the Takeovers Panel and the courts to resist a creeping takeover.

In 2020, Singaporean family office Zentree Investments challenged Rio Tinto’s attempt to increase its stake through a deeply dilutive entitlement offer. The Takeovers Panel agreed, declaring unacceptable circumstances and forcing corrective disclosure and structural changes. This materially disrupted Rio’s path to control.

In 2025, Rio initiated a compulsory acquisition at $0.002 per share. Minorities objected, forcing the matter to the Federal Court. In 2026, the court upheld Rio’s price, but the objections delayed the process and required Rio to defend its valuation. Zentree lodged an appeal in July 2026, extending the dispute further.

ERA demonstrates that minority shareholders can use regulatory and judicial mechanisms to resist control creep and force scrutiny of compulsory acquisition.

Another is AIM Mining. Now it isn’t quite a clear cut case of blocking a takeover, but it is relevant. Earlier this year, AIM Mining sought an injunction to stop Wiluna Mining from consolidating a blocking stake that would give it effective veto power over any future scheme. Although the injunction failed, the case illustrates how minorities can use litigation, register strategy, and regulatory pressure to resist creeping control.

Closing reflection: Can you stop a takeover as a minority shareholder?

Takeovers are often framed as inevitable once a bidder appears. The reality is more nuanced. Minority shareholders have meaningful rights at specific stages, and those rights have been exercised successfully in real ASX cases. The above case studies show that it is practical, structured, and effective when deployed at the right moment.