The Securities Commission Malaysia (SC) reviews documents relating to offers and schemes that fall under Division 2 of Part VI of Capital Markets and Services Act 2007 (CMSA) and the Rules on Take-overs, Mergers and Compulsory Acquisitions (Rules). The objective of the review is to ensure compliance with the requirements under the CMSA, the Malaysian Code on Take-overs and Mergers 2016 and the Rules.
In this connection, the Take-overs and Mergers Department (TOM) reviews and provides comments on the disclosure made in offer documents and offeree board circular (for offers), scheme documents (for schemes) and independent advice circulars (for both offers and schemes).
The relevant documents are to comply with the minimum disclosure requirements as provided for in Schedule 1 (for offer documents), Schedule 2 (for independent advice circulars) and Schedule 3 (for scheme documents) under the Rules. All these documents could only be posted to the board, shareholders and holders of convertible securities of the offeree after the SC has notified that it has no further comments thereon.
An adviser who is to provide independent advice made through an independent advice circular will need to ensure its independence based on the factors provided under paragraphs 3.09 and 3.10 of the Rules. This is to ensure the offeree shareholders receive competent independent advice before making an informed decision on the offer or the scheme. The independence assessment of an adviser is a self- examination approach and its appointment is not subject to the SC’s approval. Nevertheless, the appointed adviser is to confirm its independence to the SC within 3 days of its appointment. In addition, broad guiding principles on the quantitative and qualitative assessment by an independent adviser are provided to assist the independent adviser in making recommendation on offers and schemes.
Given that timing is of essence in an offer and scheme, the Rules stipulated specific timeline for the submission of documents for the SC’s review and their dispatch.
For offers, the first draft offer document is to be submitted to the SC within 4 days after the issuance of the offer notice whilst the first draft offeree board circular and independent advice circular are to reach the SC within 20 days after the issuance of the offer notice. The final offer document is to be issued by 21 days after the offer notice whilst offeree board circular and independent advice circular are to be dispatched within 10 days, subsequent to the issuance of the offer document.
Offer Documentation Timeline
For schemes, the SC would expect to receive the first draft scheme document within 4 days, and the first draft independent advice circular within 20 days, from the date of the announcement by the offeree board to table the resolution of the scheme for its shareholders’ approval. Both scheme document and independent advice circular are to be posted within 35 days of the above mentioned announcement.
Scheme Documentation Timeline
The documents review by the SC is to facilitate the promotion of a fair, efficient and transparent take-over market through quality and meaningful disclosure with the provision of relevant and sufficient information so that shareholders could consider the offer or scheme within a reasonable time period.