Flexibilities in complying with take-over offer requirements under Capital Markets and Services Act 2007 and Rules on Take-overs, Mergers and Compulsory Acquisitions

23 April 2020

As part of the Securities Commission Malaysia’s (SC) ongoing effort to ensure the capital market continues to support the economy, the SC is granting the following flexibilities in complying with the relevant requirements under Capital Markets and Services Act 2007 (CMSA) and the Rules on Take-overs, Mergers and Compulsory Acquisitions (Rules) to facilitate the implementation of take-over offers during the Movement Control Order (MCO) period.
  • A. Service of Notice and Documents
    For the purpose of complying with the requirements relating to the delivery of take-over offer documents under paragraphs 9.10(5)(b), 11.02(1), 11.03(1), 11.04(1) & 12.03(1)(b) of the Rules and sections 222(1) & 223(2) of the CMSA:
    1. The offeror or board of offeree may provide an electronic copy of the required notices and documents under the above provisions on a website, as a means of making available such notices and documents.
    2. However, the offeror or the board of the offeree, as the case may be, is required to send concurrent notification to all offeree shareholders, to inform them of the publication of the notice or document on the website, providing details of the relevant website (Summary Notification). This Summary Notification is to be sent out to shareholders:
      (i) in hard copy form, by post to the shareholders' registered Malaysian address maintained with Bursa Malaysia Depository Sdn Bhd (Bursa Depository); or
      (ii) in electronic form, by e-mail to the shareholder's e-mail address registered with Bursa Depository, where a shareholder has already opted for electronic delivery.
    3. For the purpose of paragraph 1 above, the designated websites on which the required notices and documents are to be placed are:
      (i) Bursa Malaysia Bhd's website, where the offeror or the offeree company is a publicly listed company in Malaysia (https://www.bursamalaysia.com/market_information/announcements/company_announcement); and
      (ii)

    Securities Commission Malaysia’s website, where neither the offeror nor the offeree company is publicly listed in Malaysia (https://www.sc.com.my/resources/take-overs-related-publications-announcements)

      Advisers (including independent advisers), offerors and board of offerees must ensure that the Summary Notification in paragraph 2 above are sent out for the purpose of:
      (i)

    The copy of the written notice under Rule 9.10(1) to be provided to all offeree shareholders [Rule 9.10(5)(b)];

      (ii) The publication of the offer document on the website to be provided to all offeree shareholders [Rule 11.02(1)]; and
      (iii) The publication of the offeree board circular and independent advice circular on the website to be provided to all offeree shareholders [Rules 11.03(1) and 11.04(1)].
    5. The Summary Notification must include the relevant information including, but not limited to, the following:
      (i) The salient information regarding the take-over offer:
        (a) Name of the offeror, the ultimate offeror; and persons acting in concert;
        (b) Name of the offeree;
        (c) Key terms of the offer: Securities to which the offer is extended to, offer price, mode of consideration, important dates on the offer timeline;
      (ii)

    In the case of a publication of the offer document, a copy of the Form of Acceptance and Transfer and a copy of the Bursa Depository Transfer of Securities Request Form (FTF010) (Bursa Depository Transfer Form) must be provided together with the Summary Notification;

      (iii) In the case of a publication of an offeree board circular and independent advice circular, a brief summary of the opinion and recommendation by the offeree board and independent adviser;
      (iv) A statement requiring shareholders to register their e-mail addresses with Bursa Depository via Bursa Malaysia's website
    (https://www.bursamalaysia.com/trade/our_products_services/central_depository_system/request_for_estatement) or via the Bursa Anywhere application; and
      (v) In relation to paragraph (iv) above, to include a cautionary statement on the importance for shareholders to register their e-mail addresses, as in the event of any further restriction to movement or any other emergency, an electronic documentation and service may be the only mode that can be employed.
  • B. e-Acceptance and e-Transfer
    6. Shareholders are to be provided with two methods of sending the duly completed Form of Acceptance and Transfer and Bursa Depository Transfer Form (collectively referred as Forms) to the share registrar and the Authorised Depository Agent (ADA), respectively:
      (i)

    via e-mail, to the e-mail addresses provided in the Forms; or

      (ii) via post, to the postal address provided in the Forms.
    7. To ensure the process of e-acceptance and e-transfer in undertaken smoothly, clear instructions must be given to shareholders.
    8. Shareholders are encouraged to send the Forms via e-mail to avoid risk of possible delay which posting of physical documents may pose.
  • C. Extension for Settlement of Consideration
    9. In relation to paragraph 14.01(1) of the Rules, the period during which an offeror must pay the cash consideration to all accepting shareholders is extended from 10 days to 12 days from-
      (i)

    the date the offer becomes or is declared wholly unconditional, if the valid acceptances are received during the period when the take-over offer is still conditional; or

      (ii) the date of the valid acceptances, if the valid acceptances are received during the period after the take-over offer is or has become or has been declared wholly unconditional.
  • D. Declaration for Compulsory Acquisition
    10.

    For the purpose of complying with the requirement under section 222(1)(B) of the CMSA pertaining to a copy of a statutory declaration that is required to accompany the notice of compulsory acquisition, the offeror shall instead –

      (i)

    submit a declaration to the SC (SC Declaration) confirming that the conditions for the giving of the notice are satisfied; and

      (ii) provide a copy of the SC Declaration together with the notice of compulsory acquisition to the dissenting shareholders.
    11.

    However, the applicability of the flexibility provided in paragraph 10 above shall be restricted only where the rights to invoke a compulsory acquisition under section 222 of the CMSA arises during the MCO period.

  • E. Other Extension of Time
    12.

    Other than flexibilities and extension of time granted above, advisers are reminded to consult with the SC at the earliest opportunity should there be any need for an extension of time to comply with any provision of the Rules due to any anticipated difficulties in complying with the stated timelines during the MCO period. The SC shall assess on a case-to-case basis.

While the above flexibilities are applicable to general offers, the SC may consider according similar flexibilities in other take-over related documents such as whitewash transactions and schemes to which the Rules apply. The SC would also like to remind the relevant persons to carefully consider the above flexibilities and to ensure all other requirements under the CMSA and the Rules are fully complied with.
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