Changes to takeover code address competitive bids, boards' roles, timings

THE Monetary Authority of Singapore (MAS) will introduce changes to the Code on Take-overs and Mergers from March 25 to address the resolution of competing offers, the role of offeree boards and disclosure timeliness, the financial sector regulator announced on Thursday.

Offer-period timetables will now be aligned to that of the latest competing offer, rather than the first offer. The deadline for competing offers to be announced has also been extended to increase the prospects of competitive bids.

If neither offeror has declared its final bid in the later stages of the offer period, the revised Code now prescribes an auction process that is similar to the one used in 2013 during the takeover battle for Fraser & Neave.

The Code has also been changed to clarify that boards of target companies may seek a competing offer without being deemed to be frustrating the existing offer, which is not allowed.

Boards of target companies will also be allowed to share management projections and forecasts with independent financial advisers.

Material changes to information previously published in an offer must now be disclosed earlier. Offeree companies may post offer documents earlier in the case of pre-conditional offers.

The revisions also include clarifications on the standards required of pre-conditions in a pre-conditional voluntary offer, and on the way offer values for different classes of shares, such as preference shares, should be calculated.

The bulk of the changes are in line with proposals outlined in a July 2015 public consultation.