Take-Overs and Mergers has been revoked by the new Code. shareholders must be treated equally in any Code Takeovers and should. The Rules on Takeovers, Mergers and Compulsory Acquisitions the Malaysian Code on Take-Overs and Mergers ( Code) as. of all shareholders) governing a takeover offer, merger or compulsory acquisition from the. CMSA to the. Malaysian Code on. Takeovers and. Mergers

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17 Oct 2016 Notes on the New Malaysian Code on Take-Over 2016

Please enter a recipient name Email yourself a copy? Takeover through a Scheme made easier. Please enter an taekovers address Please enter valid email addresses Recipient name s: Securities Commission of Malaysia takeovers mergers. The Code codified 12 general principles that shall be observed and complied with by all persons engaged in any take-over or merger transaction.

Key Changes To The Take-Overs Framework In Malaysia.

Offer Price The Rules now provide that for a mandatory offer arising from an arrangement, malaysin or understanding to control, the offer price shall be the higher of: Most read articles Switzerland: The scheme of arrangement would not succeed if the acquirer is unable to obtain the minimum threshold.

Timing for disclosure It is a general principle under the Code that all parties involved in a take-over or merger transaction shall make full and prompt disclosure of all 210 information[13]. As before, the Code and Rules apply to listed corporations and do not apply to private companies.

Please enter your name Your email: The Rules now provide that for a mandatory offer arising from an arrangement, agreement or understanding to control, the offer price shall be the higher of: In relation to bwhere there is no transaction for the voting shares or voting rights of the offeree in the last 6 months, prior to a take-over offer, an offeror has to provide the basis for the offer price.

This is a positive develop for take-overs in Malaysia.

The SC reserves the right to disregard any unusually high or low traded prices within the relevant period. Onn Rules are supplemented with notes to provide guidance on the application of the Rules. For further information, please contact: For help please see our FAQ. Email a friend Your name: Please enter a maximum of 5 recipients.


The Rules are the SCM guidelines. A set of criteria for rebutting the PAC presumption is introduced and persons who are not in fact acting in concert can present evidence to rebut the presumption. Comprehensive operational and conduct requirements in relation to take-overs are now encapsulated in the Rules which contain explanatory notes providing guidance on their application.

In determining whether such significant degree of control exists, the SCM will have regard to, among others, the following:. Acquisition of shares in smaller public companies are therefore not subject to the Rules.

Under the Rules, a white knight need not be a major shareholder of the company to implement a scheme. New regulations on valuation of state-owned shares in a listed malaysiqn. ALB Asia December This means that offerors now are prevented from making offer prices which are significantly lower than the market price. The material on this site is for financial institutions, professional investors and their professional advisers. The enhanced take-overs framework is seen as a progressive step and is welcomed for its flexibility in the commercial sphere.

Under the Code where netting off was not permitted[6], the person would be deemed to have acquired 1.

Previously, under the Code, all unlisted public companies regardless of size are subject to the Code. In this article, we seek to provide an overview on the significant changes arising from the Code and Rules. Persons Acting in Concert.

Recent changes to the code on takeovers and mergers |

The requirement for the Securities Commission to approve the appointment of an independent adviser for the offeree has now been dispensed with. Additionally, if material changes or developments occur after the dispatch of documents, the Securities Commission must be notified immediately and such material developments are to be announced to the public and the stock exchange to ensure that shareholders receive information which is pertinent to their investment decision.

In relation to voluntary offers, the Securities Commission may allow such offers to be conditional on a higher acceptance threshold provided the offeror can prove that it is acting in good faith in imposing such high acceptance thresholds. Conclusion The Rules and its notes creates more clarity and progressiveness in line with increased shareholder protection. This means that the mandatory offer obligation will be triggered once the acquirer obtains control in the company.


The general principles are summarised as follows: However, an independent adviser will need to declare its independence from any conflict of interest to the Securities Commission within three days of its appointment. All parties are required to observe good standards of commercial behaviour to ensure that minority shareholders are given a fair and equal opportunity to consider the merits and demerits of a takeover offer; provide fair and equal treatment to all shareholders and ensure that information is not furnished to shareholders on a selective basis.

If a potential offeror or its PACs, deny the intention to make a takeover offer, it is then prohibited from undertaking a takeover for that offeree, for up to six months after announcing such denial.

The first category covers a company, its directors and shareholders as PACs where there is an agreement, arrangement or understanding between them which restricts the director or shareholder from offering or accepting a takeover offer, or from changing its shareholdings in the company.

The settlement period for acceptances under a takeover offer has been reduced from 21 days to 10 days for cash consideration and from 21 days to 14 days for consideration consisting of securities.

The Code widens its jurisdiction to encompass foreign incorporated companies and real estate investment trusts Reits which are listed on a Malaysian stock exchange. They came into force on December 15 and replaced the Code on Takeovers and Mergers along with the practice notes that interpreted it and the Guidelines on Offer Documentation and the Format and Contents of Applications, respectively.

With this change, Malaysian-listed Reits’ unit-holders and foreign incorporated companies’ shareholders are given the same protection as shareholders of Malaysian public companies.