Shareholders should be updated on key milestones in general offer: SGX RegCo

Singapore

IN A general offer, shareholders should be kept updated via SGXNET when the offeror has achieved the 75 per cent acceptance condition, and when the issuer has lost free float, chief executive of the Singapore Exchange Regulation (SGX RegCo) Tan Boon Gin said in his latest regulatory column.

He wrote: "In each case, the announcement should clearly disclose the specific level of independent acceptances and the issuer's free float. The announcement should also inform shareholders of the implications, including the offeror's intentions."

"It is important that shareholders are aware of the potential consequences in considering whether to accept a general offer, particularly where free float has been lost but the requisite conditions for delisting, including the 75 per cent acceptance condition, are not met. SGX RegCo wishes to reiterate that takeover documents should contain appropriate disclosures to highlight to shareholders the risk that the issuer may consequently be subject to prolonged suspension."

Under the 75 per cent acceptance condition, the offerer must receive acceptances from independent shareholders - or shareholders excluding the offeror and parties acting in concert with it - that represent a majority of at least 75 per cent of the total number of issued shares held by independent shareholders at the close of the general offer.

Citing market feedback, SGX RegCo also raised the point that market purchases from independent shareholders, purchased on and from the date the general offer was made, can be taken into account when computing whether the 75 per cent acceptance condition has been fulfilled,

"These disclosures give shareholders all facts necessary to make an informed judgement on the merits or demerits of any general offer, which would be relevant to their consideration on whether to accept the general offer," said Mr Tan, adding that SGX RegCo expects takeover professionals to advise their clients appropriately.

In July last year, SGX RegCo had amended delisting rules to enhance minority shareholder protection, clarifing at the time that if the issuer loses free float in accordance with a general offer but certain conditions were fulfilled, SGX RegCo would consider waiving strict compliance as it would take the view that delisting rules were "substantively complied with".

The conditions were that at the close of the general offer, the offeror had received acceptances from independent shareholders representing a majority of at least 75 per cent of the total number of issued shares held by independent shareholders; and that the general offer was fair and reasonable.