SECURITIES COMMISSION ACT 1993

MALAYSIAN CODE ON TAKE-OVERS AND MERGERS 1998

ARRANGEMENT OF CODE

PART II
MANDATORY OFFERS

Application of this Part

MANDATORY OFFERS Application of this Part 6.

(1) This Part applies to –

(a) an acquirer who has obtained control in a company; or
(b) an acquirer who holds more than 33% but less than 50% of the voting shares of a company and such acquirer acquires in any period of six months more than 2% of the voting shares of the company.

Nothing in this Part shall apply to –

(a)

an acquisition, or holding of, or entitlement to exercise or control the exercise of, more than 33% of the voting shares of a company by an allotment made in accordance with a proposal, particulars of which were set out in a prospectus where –
(i) the prospectus was the first prospectus for an initial public offer of voting shares issued by the company;
(ii) the person who acquired the voting shares was a promoter in respect of the prospectus and the effect of the acquisition on the person’s voting power in the company has been disclosed in the prospectus; and
(iii) the prospectus has been registered under section 42 of the Companies Act 1965; or
(b) an acquisition, or holding of, or entitlement to exercise or control the exercise of, more than 33% but less than 100% of the voting shares by a person of a company (hereinafter referred to as “the first mentioned transaction”), where-
(i) all the remaining offeree shareholders of the company are the vendors who had sold or disposed of the voting shares to the person in the first mentioned transaction;
(ii) as a result of the first-mentioned transaction, the person becomes subject to an obligation under this Part; and
(iii) such vendors who, having had an opportunity to sell or dispose of their remaining voting shares to the person on the same terms and conditions as in the first-mentioned transaction, declined to sell or dispose of their remaining voting shares.

(3) For the purposes of this section “promoter” and “prospectus” have the same meaning as are assigned to those expressions in the Companies Act 1965. (4) An acquirer to whom this Part applies shall extend an offer to the offeree shareholders in accordance with the requirements of this Code.

Management of the affairs of an offeree by an acquirer
MANDATORY OFFERS Management of the affairs of an offeree by an acquirer

7. An acquirer shall not –

(a) appoint any director to the board of directors of the offeree; or

(b) exercise the voting rights attached to the voting shares which have been acquired by the acquirer,

before the acquirer sends an offer document in accordance with subsection 13(7) to offeree shareholders.

Condition of a mandatory offer

MANDATORY OFFERS Condition of a mandatory offer 8.

(1) Unless otherwise approved by the Commission in writing, an offeror shall not include any other condition in a mandatory offer other than the condition specified under subsection 17(1).

(2) Where the offeror has acquired more than 50% of the voting shares of the offeree, the mandatory offer shall not contain the condition specified under subsection 17(1).

Nature of the consideration for a mandatory offer
MANDATORY OFFERS Nature of the consideration for a mandatory offer

9. (1) An offeror shall ensure that the consideration for the mandatory offer that is to be paid, or provided, for the acquisition of the voting shares to which the mandatory offer relates shall –

(a) consist solely of a cash sum ;or

(b) where there is more than one consideration, one consideration shall consist solely of a cash sum.

(2) Where an offeror obtains control in a company by way of a share exchange, the offeror shall ensure that the consideration for the mandatory offer includes a cash sum.

Resignation by directors

MANDATORY OFFERS Resignation by directors 10.

A person who intends to sell his or its voting shares to an acquirer shall not resign as director or cause a director who is accustomed to act in accordance with his or its directions or instructions to resign, as the case may be, from the board of directors of the offeree until the first closing date of the take-over offer or the date when the take-over offer becomes or is declared unconditional as to acceptances, whichever is the later.