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

SHAREHOLDERS should be kept updated regarding certain key milestones via announcements on SGXNET when it comes to a general offer, Tan Boon Gin, chief executive of Singapore Exchange Regulation (SGX RegCo), has said.

In his latest Regulator’s Column, he said shareholders should be updated when the offeror has achieved the 75 per cent acceptance condition, and when the issuer has lost free float.

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.”

He added: “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.

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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.

Last July, SGX RegCo amended the delisting rules to enhance minority shareholder protection, clarifying at the time that if the issuer loses free float in accordance with a general offer but certain conditions are fulfilled, SGX RegCo would consider waiving strict compliance. The conditions were that at the close of the general offer, the offeror has to have received acceptances from independent shareholders that represent a majority of at least 75 per cent of the total number of issued shares held by independent shareholders, and that the general offer is fair and reasonable.

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