The New Takeover and Merger Code of Singapore

The new Takeover and Merger Code of Singapore

Our current capitalistic society has created an atmosphere of intense competition. Of course, competition isn’t the worst thing in the world, being one of the most important reasons we get the high-quality products and services that we do. Consumerism is only enhanced and increased due to the excessive amount of choice we now grapple with on a daily basis, also brought to us, by competition. 

1. clarifying that in a competitive situation the offer timetables will be aligned to that of the latest offer;
2. prescribing a default auction procedure, if neither offeror has declared its final offer price in the later stages of the offer period;
3. extending the deadline for a potential competing offeror to clarify its intentions;
4. defining that soliciting a competing offer or running a sale process does not amount to the frustration of the existing offer, and including a statement that in cases of doubt SIC should be consulted;
5. clarifying that an offeree board may consider sharing available management projections and forecasts with its independent financial adviser;
6. changes to when no increase and no extension statements may be set aside following the release of new information by the offeree company;
7. providing for the settlement of acceptances within 7 business days (instead of 10 days);
8. requiring prompt disclosure of any material change to information previously published in an offer to ensure that shareholders and investors get apprised of material information on a timely basis; and
9. codifying and streamlining existing practices relating to pre-conditions in a pre-conditional voluntary offer, allowing the posting of offer documents by offeree companies at an earlier date in a pre-conditional offer, and calculation of the values of comparable offers for different classes of shares.

1.  Paid press notice- Under Note 7 on Rules 3.1, 3.2 and 3.3, the paid advertisement may be published in the most widely-circulated leading English-language newspaper, instead of in two leading English newspapers. The SIC has also clarified that “published daily” includes, for the avoidance of doubt, “published every day except Sunday”.
2. Solicitation of a competing offer - SIC has clarified that the intention is not to impose an obligation to seek a competing offer and that it believes this is sufficiently clear in the proposed amendments. It has however added a statement in Note 8 of Rule 5 that it should be consulted in cases of doubt.
3. Material changes in new or published information- Suggestions made during the consultation included aligning the Code requirements for prompt disclosure of changes to previously disclosed information or new information with the SGX rules on disclosure including the exceptions provided for in those rules. This condition was not accepted. SIC pointed out that parties may consult it if necessary and added a statement in Note 1 to Rule 8.1 to remind parties of this. SIC is also of the view that it is not practicable for the Code to set out all the circumstances in which a material change of information will require the offeree board and independent financial adviser (“IFA”) to update their recommendations. Note 1 on Rule 8.1 has been amended to provide that such information should apply and where appropriate the offeree board and IFA should change their recommendation or advice, and that SIC would clarify in cases of doubt.
4. Shareholdings and dealings- Rule 24.3 is amended to make it clear that the applicable period for the dealings disclosure should be three months in the case of voluntary offers.
5. Offer timetable after the end of an auction procedure- Adjustments were made to the timeline following the end of auction proceedings. The deadline for posting of revised offer documents is now 7 days after the end of the auction. The offeree must post its circular on a revised offer no later than 7 days after the revised offer document gets published. The latest date by which a competing offer may become unconditional as to acceptance is 7 days after posting of the revised offer document.