SECURITIES COMMISSION ACT 1993

MALAYSIAN CODE ON TAKE-OVERS AND MERGERS 1998

ARRANGEMENT OF CODE

PART VII
OBLIGATION OF OFFEROR IN RELATION TO OFFER

Identity of offeror, persons acting in concert and ultimate offeror
OBLIGATION OF OFFEROR IN RELATION TO OFFER Identity of offeror, persons acting in concert and ultimate offeror

26. (1) A person who conducts discussions or negotiations on behalf of a proposed offeror with a person with a view to a take-over offer being made for the voting shares of a company shall disclose to the other person at the beginning of the discussions or negotiations the identity of-

(a) the proposed offeror and all persons acting in concert with the proposed offeror; and
(b) the ultimate offeror, if applicable.

(2) In this section, “ultimate offeror” includes –

(a) a person in accordance with whose directions and instructions the proposed offeror or any person acting in concert with the proposed offeror is accustomed to act; or
(b) a person having an interest in the proposed take-over offer pursuant to an agreement, arrangement or understanding with the proposed offeror or any person acting in concert with the proposed offeror.
Evidence of ability to implement the take-over offer
OBLIGATION OF OFFEROR IN RELATION TO OFFER Evidence of ability to implement the take-over offer

27. A person who is required to make an announcement under subsection 12(1) or 12(3) shall ensure and the person’s financial adviser is reasonably satisfied that –

(a) the take-over offer would not fail due to insufficient financial capability of the offeror; and
(b) every offeree shareholder who wishes to accept the take-over offer will be paid in full.c
Favourable deals

OBLIGATION OF OFFEROR IN RELATION TO OFFER Favourable deals 28.

The offeror shall not enter into any agreement, arrangement or understanding to deal in or make purchases or sales of voting shares of the offeree, either during a take-over offer or when such a take-over offer is reasonably in contemplation by the offeror if such agreement, arrangement or understanding to deal have attached thereto favourable conditions which are not being extended to all offeree shareholders.

Comparable take-over offers for more than one class of share capital

OBLIGATION OF OFFEROR IN RELATION TO OFFER Comparable take-over offers for more than one class of share capital 29.

(1) Where an offeree has more than one class of share capital, the offeror shall make a comparable take-over offer for each class of share capital on terms which shall be approved by the Commission.

(2) Classes of share capital which are not voting shares and which do not entitle the holder thereof to any right to participate beyond a specified amount in any distribution, whether by way of dividend, or on redemption, in a winding up, or otherwise, need not be the subject of an offer except in the circumstances referred to in section 30.

(3) An offeror shall not make a take-over offer for share capital other than voting shares to which the take-over offer relates which is conditional on any particular level of acceptances in respect of that class of share capital unless the take-over offer for such voting shares is also conditional on the success of the take-over offer for that class of share capital.

Treatment of convertible securities

OBLIGATION OF OFFEROR IN RELATION TO OFFER Treatment of convertible securities 30.

(1) Where a take-over offer is made for the voting shares of an offeree and the offeree has issued convertible securities, the offeror shall make a take-over offer to purchase those securities and shall make appropriate arrangements to ensure that the interests of holders of convertible securities are safeguarded.

(2) The offeror shall post the take-over offer document to purchase the securities referred to in subsection (1) to the holders of the convertible securities at the same time that the offer document is posted to the offeree shareholders in accordance with subsection 13(7).

(3) The take-over offer to holders of the convertible securities referred to in subsection (1) may be effected by way of a scheme approved at a meeting of the holders of the convertible securities.

Compulsory acquisition

OBLIGATION OF OFFEROR IN RELATION TO OFFER Compulsory acquisition 31.

(1) Where an offeror makes a take-over offer for more than one class of shares, separate offers must be made for each class and the offeror shall state, if the offeror intends to resort to compulsory acquisition powers under section 34 of the Act, that the section will be used only in respect of each class separately.

(2) The forms set out in Schedule 3 are prescribed for use under sections 34 and 34A, as the case may be.

Sales and disclosure of dealings by offeror etc. during offer period

OBLIGATION OF OFFEROR IN RELATION TO OFFER Sales and disclosure of dealings by offeror etc. during offer period 32. (1) The offeror shall not sell any voting shares to which the take-over relates during an offer period.

(2) A person acting in concert with the offeror shall not sell any voting shares to which the take-over relates other than to the offeror.

(3) Without prejudice to subsection 11(6), the following persons shall disclose the total number and price of all voting shares of the offeror and the offeree which are dealt in for their own account:

(a) the offeror and all persons acting in concert with the offeror;
(b) in the case of a securities exchange offer, a substantial shareholder of the offeror;
(c) any chief executive, a director or an officer of the offeror who occupies or acts in a senior managerial position in the offeror, by whatever name called and whether or not he is a director;
(d) a person who is a connected person in relation to persons referred to in paragraphs (a), (b) and (c); and
(e) a person who is accustomed to act in accordance with directions or instructions of the persons referred to in paragraphs (a), (b), (c) or (d).

(4) The disclosure under subsection (3) shall be made to the relevant stock exchange, if the securities of the offeror or the offeree are listed on the relevant stock exchange, and the Commission, and announced by way of a press notice, not later than 12.00 p.m. on the market day following the date of the relevant transaction.

(5) All dealings in voting shares of the offeror or the offeree made by a connected person for the account of investment clients who are not themselves a connected person shall be similarly disclosed to the relevant stock exchange, if the securities of the offeror or the offeree are listed on the relevant stock exchange, and the Commission at such time and in such manner as is provided in subsections (3) and (4) respectively.

(6) The relevant stock exchange shall not release the information under subsection (5) to any person without prior approval of the Commission.

(7) For the purposes of this section, “connected person” means all persons (whether or not acting in concert) who directly or indirectly own or deal in the voting shares of the offeror or offeree in a take-over offer and who have (in addition to their normal interests as shareholders) an interest or potential interest, whether commercial, financial or personal, in the outcome of the take-over offer and include-

(a) the offeror’s holding company, subsidiaries and their associated companies, and companies of which such companies are associated companies. For this purpose, ownership or control of 20% or more of the equity share capital of a company will be regarded as the test of associated company status;
(b) a banker, stockbroking company, financial and other professional adviser to the offeror or to any company referred to in paragraph (a);
(c) the directors of the offeror or any company referred to in paragraph (a) and their spouses, parents, children, brothers, sisters and the spouses of their children, brothers or sisters. For the purposes of this paragraph “children” includes adopted children and step-children ;
(d) the pension funds of the offeror or of any company referred to in paragraph (a);
(e) any investment company, unit trust or other fund whose investments a connected person manages on a discretionary basis; and
(f) a holder of 10% or more of the equity share capital of the offeror.
Restrictions if take-over offer is withdrawn or lapses

Restrictions if take-over offer is withdrawn or lapses Sales and disclosure of dealings by offeror etc. during offer period 33.

(1) An offeror or any person acting in concert with the offeror shall not withdraw a take-over offer without the prior written approval of the Commission.

(2) Where a take-over offer has been withdrawn or has lapsed, the offeror and all persons acting in concert with the offeror shall not within twelve months from the date on which such take-over offer was withdrawn or lapsed-

(a) make a take-over offer for the voting shares that had been the subject of the previous take-over offer; or
(b) acquire any voting shares of the offeree if the offeror would thereby become obliged to make a mandatory offer; or
(c) acquire any voting shares of the offeree if the offeror holds voting shares carrying over 48% but not more than 50% of the voting rights of the class of voting shares that had been the subject of the previous take-over offer.

(3) The offeror and all persons acting in concert with the offeror shall furnish the Commission with details of any acquisition by the offeror and persons acting in concert with the offeror of any share of the offeree including an option to acquire any share in the offeree each month for a period of twelve months from the date on which the take-over offer was withdrawn or had lapsed.