Proposed changes to Takeover Code welcome

IN many takeovers that involve privatisations, minority rights are usually trampled on by the actions and intent of the majority. This is sometimes unavoidable since those who own most of the shares also control the fate of the company and therefore have to have a larger say.

Also, arriving at an outcome that satisfies everyone is sometimes not possible - buyers who might include the majority shareholders want to pay as little as possible but wish to make it seem that their offers are attractive enough to be accepted, while sellers want the highest possible price, preferably one arrived at via a transparent competitive bidding exercise.

It goes without saying that these prices will naturally always be far apart, so all the rules can do is balance the two conflicting positions to hopefully arrive at a suitable middle ground. In this regard it is encouraging to see the changes to the Singapore Code on Takeovers and Mergers proposed on Monday by the Securities Industries Council (SIC).