Takeovers and Mergers in Singapore

Guide to Takeovers and Mergers in Singapore

Introduction 3 What governs and regulates a take-over and merger in Singapore 4 Main liabilities in a take-over and merger 7 Modes of acquisition 7 Consideration 15 Specimen timetable for a take-over offer 21 Specimen timetable for a take-over offer in competitive situations 22 Case study: F&N Take-over 2013 23 Contact details 25 PAGE 3 over in -

over over in Singapore and should not be - overs overs and Mergers ("Code") effective on 25

- Readers should note that this guide seeks only to be an introduction to some of involved the in a take compliance obligations treated as comprehensive. This guide advice. legal as on relied should not be There were to amendments the Companies Act, govern- ing the compulsory acquisition mechanism that came into effect on 3 January 2016 (“Companies Act Amend- ments”). This memorandum states the position under 2016. on July as rules and regulations the laws, INTRODUCTION This guide discusses some of the regulatory requirements to be complied with by parties involved in a take Singapore, following the revision to The Singapore Code on Take amendments"). ("2016 2016 March

related work related for a - all all documents to over over offers of shares

OVER AND -

the Securities and the(SFA) Futures Act Securities and Unlisted Singapore companies with more than incorporated 50 shareholders public and net tangible assets more of $5 million or Unlisted registered business trusts with more than 50 unitholders and net tangible assets moreofmillion or $5 General General Principle 11: must shareholders be to prepared the highest of standards care toand accuracy, ensure that they are not misleading. Special care is required in casts. respect of profit fore- Corporations (whether or not incorporated in Singapore) with a primary listing of their in shares Singapore Business trusts with a primary listing of their unitsin Singapore Real Investment Estate Trusts (“REITs”) under

     show that a criminal offence has taken place whether under the Companies Act, the SFA or under the criminal law, itwill refer the matter to authority. the appropriate The Council may also require pay an to offender the to holders of securities of company the offeree a just and ensure reasonable the amount holders to receive have what been they entitled would to if a relevant Rule had   The terms “business trust” and “registered business trust” have the same meanings attributed to such terms by Section 2 of the Business Trust Act (Cap. 31A). Presently, the Code also has a table of prescribed lodgement fees for various takeovers. thresholdsof Although the Code is not law, a breach of the Code may prompt the Council to issue vate a pri- reprimand or public action as censure the Council or thinks further fit, the ofdesignedto offender benefits deprive an including one of the capital markets. In the case of advisers, the Council may also require such advisers toabstain takingfrom on Code stated period. If the Council finds evidence to f. Application The Code applies to take or units of:   

overs and -

shareholders shareholders of the all all parties to a take

there there are limits on the over over of a public company (“company”) is principally regulated by the an an offeror must treat all the offer should only be only offer be the should statutory statutory in nature, it is - -

over.

SINGAPORE -

over, over, to act in what they consider to situation; over

- - over over must make full and prompt disclosure of all relevant information and endeavour use to every prevent the false creation market in of the shares of a the offeror or the target company; and target target company must be given information, advice sufficient and time to make an adequate assessment and decision on the offer. No an relevant informa- informed them; from withheld be must tion General Principle 12: General Principle 3: General Principle shareholders of the same class in a target company equally. This applies not only to the to but terms of the offer the also nature, quality and timing them;to available of information made General Principle 10: take and the of company inbe the interests best accept therefore must They its shareholders. that there are limitations on the manner in which those interests can be pursued in a take when when the offeror has every reason to lieve be- that it can in full; and offer the implement to able will continue to be General Principle 2: freedom of action which directors normally would have, outside the context of a General Principle 6: Principle General and careful consideration after announced

e. c. d. b. mentation mentation and the various types of offers and Take a in terms their principles General a. The The body which administers and enforces the provisions of the Code is the Securities Industry (“Council”). Council Basically, the Code states its rules on proach, the the Ap- Conduct, the Timing, the Docu- While While the Code is non issued by the Monetary Authority of Singapore it upon conferred theto power pursuant ("MAS") SFA. the of 321 and 139(2) by Sections In Singapore, the take following regulations and statutes. The Singapore CodeMergers on Take WHAT GOVERNS ANDMERGER REGULATES IN A TAKE

PAGE 4 PAGE 5

over - overs. - overs. - over Code) over offer is - - ST or a foreign -

over Offers) contains - over Offers) applies to all ST and where the total - -

should be calculated in the new Note 1 on Rulethe of Code. 18 or more voting shares) shares in (excluding shares a are treasury listed Singapore on companythe SGXwhose company shares haveing whose a primary on list- thevotes attached SGX to not less that than shares5% of the total orto votes shares attached all is shares), voting must shares notify such (excluding company of treasury his “apply to and in relationsons, towhether all natural resident andper- in whether Singapore citizens and or to not of all Singapore corporations porated, or whether not, or bodies incorporatedon unincor- business or carrying in extend Singapore to acts done or outside not, Singapore.” and shall Part VIII Council ofand Take theofferors regardless SFA whetherporated (Securities orthey carrying are onincor-pore Industry businessesor are foreigners in orSinga- Singapore citizens. The SFA ments governs on the part theofers substantial of disclosure sharehold- listed Exchange companies require- Securities on ST"). Trading the Limited Singapore ("SGX Section 135 SFA (Dutyholder of to substantialnotify theterests)share- incorporation of his in- Anyone (i.e. includingwho acquires a an interest body or corporate) interests in one Securities and Futures “SFA”) Act (Cap. 289) (the Part VIII Council of and the legal provisions Take SFA pertaining to take (Securities Industry Offences The SFA lists offences relatingFor instance,to take pursuantan offence to for anyone Section to makeoffer 140,a take if it he is hashe no will grounds be able toand believe toconditions fulfil that once thebeing the accepted. relevanttake terms Application Section 139 ofeffectively the SFA states (Take that the Code shall -

conditions in a pre -

conditional conditional offer in the new Note on - the offer document at an earlier date in a pre theand Rule Code; of 22.1 clarifying thehow offer value for a different class of shares (e.g. preference shares) codifying and streamlining the required standards of conditional voluntary offer in the new Note pre 5 on Rule 15.1; permitting the offeree company to post rial information on a timely basis in Note 1 on Rule 8.1; adopting a 7 business day settlement period instead of the day previous settlement 10 calendar period as 30; theRules and 16.6 amended reflected from ent financial adviser in the new Note 5 on Rule 7.1; requiring earlier disclosure of any material change to information previously published in an offer in order holders investorsand to are apprised of mate- ensure that share- to frustration of the existing offer and that SIC should be consulted in cases of doubt the on in Rule 5; 8 Note new clarifying that an offeree board can consider sharing available management projections and forecasts with the independ- extending the deadline competing offeror for to announce the a making of potential a competing offer in the new Note 6 on 3.3; Rules 3.1, and 3.2 clarifying that soliciting a competing offer or running a sale process does not amount on on Rule 22.9; prescribing a default auction procedure, if neither offeror has declared its price final in the later offer stages of the offer period thein Rule 20.5; new clarifying that the offer timetables will aligned be to that of the there competing inoffers latest are the new Note offer, where

10. 8. 9. 7. 6. 5. 3. 4. 2. In summary, the key amendments in the as are amendments follows: 2016 1. a period determined by the is payment made. Council until full The 2016 Amendments The 2016 amendments to the Code came into 2016. effect 25 March on been complied with. In addition, the may Council also make a interestcompound to be paid at a and rate for ruling requiring simple or

ST, depending on - overs in Chapter 10 -

ST. -

Acquisitions and realisations(Announcement in Rule 704 oftion). Specific Informa- IPTs in Rules 905quirements). and 906 (General Re- Discloseable transactions,actions major or very trans- or substantial reverse acquisitions(Acquisitions take and Realisations).

   competitive agreementsabuse (Section of 34), (Section the 47) a and mergers stantialresulting dominant in a lessening sub- 54). market of competition position (Section The Competition tion Act allows Commission the of Competi- Singapore (“CCS”) to For acquisitions and Manual realisations, imposesthe Listingfollows: disclosure obligations as    Competition Act (Cap. 50B) TThe Competitionthat result Act competition in prohibits within a any market substantialservices mergers for ingoods Singapore. or alleviation orAny party consult may of notify the Singapore Competition for Commission any a merger of decision that it oris thatabout may guidance affectto undertake it. on or The Competition Act prohibits anti Listing Manual The Listing Manualquiring appliescompany or where thelisted targeton the the SGX company ac- is Chapter 9 (Interestedstates Personrequirements Transactions) to beinterested met in personrelation transactions to (“IPTs”). Chapter 10 (Acquisitionsprimarily and lists Realisations)needed varying to levels be pany complied of listed obligations with on which the by materiality SGX a com-are thresholds crossed by the set transactionbe out proposed undertaken within to by closeable the company transactions, (e.g. very major dis- transactions, substantial takeovers). acquisitions and reverse Chapter 11 overs (Takeovers) and complements pertainsthe Code. the to regulations take- in

overs and

governed by the Companies Act. The Companies work Actfor schemes provides of arrangement 210, the(Sections 212) frame- 215A to and 215K) in amalgamationsmergers.corporate Fortake example, (Sectionsquisition the compulsory of shares (Section ac- of minority 215) shareholders of the target companies is acquisition or disposal are complied with. Companies Act (Cap. 50) Sections 210, 212, 215, 215A fore the offer lapses,provided closes orsuch is changewithdrawn tances results receivedfrom accep- pursuantcomply to withthe the offer provisionsany that other of acquisitionthe offeror Code or or disposal and made providedsure by requirements the under relevant the Code disclo-on such Such exemption applieswell toas to any any offerorpersoninterest (as deemed in to thehave who hasan shares announced heldan offererned (which by by isthe the gov- Code) for offeror) a listedrespect companyof any inchange in theest offeror’s after inter- the offer announcement and be- gated under the sons SFA exempt from certain(which the per- governs entire disclosureobligations, Part and VII notification and 135 of and which136 SFA the referred contains to SFA above). Sections SFA) to the interest or intereststial of shareholder. a substan- Thewithin notice 2 businessmust beshareholder days given after the becomes substantialchange. aware of such However, a exemption regulations promul- The SFA also imposestion a on continuing a written obliga- substantial notification shareholderto sequentthe company changes toof sub- give (subjectage threshold to theset out percent- in Section 136 of the classes of shares, shareholder a person if is he amore of substantial has the voting an shares interest of that class. of 5% or Section 136 SFA (Dutyholder of substantial to notify interests)share- corporation of change in interest within 2 businessing days after aware becom- that holder. he Where is the a company substantial has share- different

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over offer -

over, over, the associates of an offeror or the - Mandatory Mandatory offer

The offer is conditional upon the offeror obtaining a minimum level of acceptance which has the offeror and parties acting in concertwith it holding shares that carry more than 50% of the voting rights theof target. target target may not as such acquire the either shares the of offeror or the target for the purpose of manipulating the price companies. of either of these Anyone who commits offences the may subject abovementioned themselves prosecution or to a civil suit by criminal an affected inves- MAS. the by action civil a even or tor MODES OF ACQUISITION One can acquire control of a Singapore public company by several forms of acquisition. (A) Take These offers comein 3 forms: (1) What is a Mandatory Offer? This is triggered under when an Rule offeror and parties 14 acting in of concert thewith it acquire Code shares of the target in amounts crossing the threshold prescribed in Rule 14. of the offeree derivatives. and options companywarrants, securities, include convertible Rule 11.1 (Restrictions on dealings offer) of before the Code and Sections 218 the (Prohibited conduct by connected person in possession of inside and conduct information) 219 (Prohibited by other inpersons of possession inside information) of the SFA restrict dealing possession by of persons confidential in price sensitive information. Sections 221 (Penalties) and 232 (Civil penalty) on civil penalties and criminal impose the of SFA persons who contravene SFA. the the under provisions insider dealing Manipulation Market It is an offence under market Section manipulation) of 198 the (Securities SFA to any transaction in carry securities which out manipulates the price of securities of a listed company with the intent to induce investors to withdeal those securities or other related securities take and in a

sensitive sensitive

over, he - -

over will need -

ST, Singapore Ex-

OVER AND MERGER - ownership in the following sectors: - competitive effects in Singapore. - namely the Singapore Exchange Pte Ltd, therivatives Singapore Clearing Exchangepore De- Limited MercantileCorporation and Pte Ltd Singa- Exchange Holding Clearing company of change anor a designated approved clearing ex- house Telecommunications companies Exchanges change (SGXDerivatives Trading SingaporeLimited Mercantileand Exchange Pte Ltd Clearing houses: The Central Depository Banks and finance companies Insurance companies Newspapercompanies and broadcasting        all shareholders of the target. Therefore if during if the of during target. all Therefore shareholders the course of negotiation an offeror is provided with price sensitive information from the target, the offeror must then take note of trading prohibitions. the Under the insider Code, securities Insider Trading Insider If an offeror is in information possession relating to of the price target, deal he with cannot its shares until the longer information price is sensitive no and in is bid cannot to the unless information disclosed a take MAIN LIABILITIES IN A TAKE the merger “Guidance procedures Note on of Mergers”).offers the Whereunder suchthe CCS Codeof fallthe (the merger within provisions the ambitofAct, the Competitionthe parties toto the take comply both the with Code and the Competition the Act. requirements under Mandatory offers under taryRule offers14 andunder volun- Rulewhere 15 of appropriate, the Code be may,the required to terms contain Code, set which outprovides ina guidance Appendixnote on 3 of the        Notwithstanding, therequirement is to no or notify mergers statutory to the agreements, CCS. re- conduct Prior regulatory share approval is required for review and anti regulate mergers that have

Where Where a over over bid; - over over bid un- -

back. - In very excep- backs in Appen- -

Where Where shares in the

back guidance note) - Where the whitewash over over offer by the offeree - over over threshold; - there is an shareholders’ independent meeting vote approving at the issue theof securities. a a waiver will also normally be granted where (a) the obligationthe arises underwriting from of securities, an (b) issue there is an of independent new vote at a shareholders’ meeting; and the underwriter puts in place clear and effective arrangements not to exercise the voting rights theseof shares;

company for their company, and shares such written undertaking inis thegiven before the acquisition target by the offeror of shares in the target company thetake crossing Placing and top up transactions: person and the parties acting with in concert him hold 50% rights in or the less target company, of places of part the his holdings voting to one or moreent parties independ- and then, as soon as practicable subscribes for such additional shares as he requires to maintain interest in the the percentage target company held prior to whichthe placement at a price sub- he stantially equivalent to the after placing price taking into curred in thetransaction; and account expenses in- Share buy backs: procedure for share buy dix 2 theof Codeis compliedwith. (ii) Enforcement or foreclosure of security for a loan, receivers, etc.: target company constitute security loan for a and upon ment, the foreclosure lender would or incur tion the enforce- to obliga- make a mandatory take Balancing blocks of 50%: tional cases, where shareholder(s) holding 50% or more of the votes attached to the remaining shares of the target have, without company receiving any to do inducement so, stated in writing that they will not accept any take

tors and persons acting in concert whowith are them obliged to make a take der Rule 14 following share a buy Furthermore, there is a class exemption in case the of a listed company, for its directors and persons acting in concert with them, for situa- d) e) Appendix 2 (Share buy of the Code sets out briefly the procedure and conditions on which an requirements exemption of Rule from 14 the are granted to direc- b) c)

seeking seeking - seeking).

month period additional - over over bid arises from the - seeking (Note 3 on Rule 14.1 sets -

issue of new securities as consideration for an acquisition, a cash subscription or the taking of a scrip dividend and where the obligation to make a mandatory take

(i) acquires in any 6 shares carrying more than 1% of the voting rights of the targetcompany. voting rights a of person acting in who, concert awith him, holds between together 30% and company; with 50% of persons target the company voting and or such rights person, or in any person the acting in concert with him, a person acquires, whether by a series transactions of over a period of time or shares not, which (taken together with held or acquired shares by persons acting in concert with him) carry 30% or more of the Issues of new securities:

a) taken to determine if this not apply. default rule would person is regarded as having a long economic exposure to changesin the price of shares if he benefits economically from the price increase or suffers decrease. Where economically there transactions are from such proposedconsultation involving with the theCouncil should be under- price convertibles, prior acquired or written shares or an derivative on option causes existing shares on which him existing exposure, whether to absolute or conditional, to changes in have the price of shares, will normally be a treated long as equivalentthose economic shares to for the having purpose acquired of Rule 14. A outthe factors relevantin determiningwhether a Subsequent proposal acquisitions of interests by is in any concert shares party could trigger a offer obligation general under Rule board 14 theof Code. control Rule 14 clarifies that any person who has proposal at a shareholders’ meeting, together with their requisition supporters or threat, act in at concert with other each the as date welldirectors. The of key to whether such as a presump- the with tion arises is whether the proposal is seen to be the proposed board control new There is a who requisition presumption or where threaten consideration to shareholders requisition the of a board control b) over over offer is required tomade be if: a) When When is a Mandatory Offer triggered? Under Rule 14 of the Code, a mandatory take

PAGE 8 PAGE 9 Over Over -

over over offer must be condi- -

door door means of acquiring control in a - ments (including approval of the offeror's shareholders and any authority). foreign regulatory The size purchases; and timing of The the attitude of the relevant company; board of the target Whether shares have been purchased at higher prices from directors or sons closely other connected with per- the offeror or and targetcompany; the The number of shares months. sixpreceding purchased in the Except with mandatory take the Council’s tional on, and only theon, offeror receiving consent, a acceptances which together with acquired shares or agreed to be acquired before by or it during the offer will result offeror in the (together with concert parties with it) acting more holding in shares than carrying attached to 50% the target company’s voting of shares. the voting Mandatory rights bids must always be in cash or provide for a cash price alternative. must The cash not be price less paid than the by withinacting within it theconcert months 6 highest the offeror making thetheprior ofto offer. and persons Except for the condition mentioned above in paragraph (1) consent, i.e. with no the acquisition wouldwhich give risetomandatorytake a Council’s of voting over rights offer may be made if it any is other subject conditions, consents to or arrange-

    (for (for example, a private limited company) and consequently, controlacquire or consolidate of a second company to which the Code apply. It is possible that does this could be used as a back company which is subject to the provisions of the Code. The Council should be consulted in The Council’s consent is required if the offeror considers that the apply highest in a price particular case. should Factors Council might which take not into the account when considering an application include: for an adjusted price,     Chain Principle A person may acquire company more to which than the 50% Code does of not apply a Conditions Imposed in a Mandatory Take Bid (1) (2) (3)

where - over over bid if where a - -

back has been mentionedcom- - - over threshold. -

backs. There is an addi- - back, back, from Rule 14 where -

back mandate, each of the direc- backs - - month period. This rule does not however - company at the pany level. ultimate holding com- scheme of reconstruction mented involves tothe transfer of be one company’s imple- controlling interest company to in another the company (whichalso target controlled bythe first is pany) such that there is,effective change in in practice, control no of the target the target company is in a serious financial position and the rescue operation involves the issue of new shares in the target company to the mandatory rescuer which crosses the take Group restructuring exercises Rescue (“white knight”) operations

to make an offer make under an Rule 14. to offer increase their voting rights by more than 1% in any 6 apply to shareholders who are concert not with acting in any director Appendix 2 sets out the incircumstances which of the company. whoa is shareholder, inwith acting concert not any director of the Company, will be required an an exemption obliged from to make a mandatory take the the Council, effect of become the shares would company be to increase buying their voting back rights in its the company to together 30% already hold or between 30% more, and 50% of or the if voting they rights, the effect would be to Appendix 2 of the resulting increase Code in the provides percentage of that voting rights heldby a and acting shareholder persons any inwith concert will him treatedbe as an acquisition for the purposes of (who is also Rule a shareholder) and persons 14. acting A director in concert with him would, in the absence of Share Buy Where a company buys back its shares, b) signed form as prescribedthe by Council. Although not specifically set inout the Code, a whitewashwaiver has also been grantedin the following circumstances: a) about by share buy tional reporting requirement seven days in of shareholders that, approving share of buy within the tors of the company (for which the shareholders’ mandate for share obtained) has buy to submit to the Council a duly tions of share buy Rule 14.1 shareholding thresholds are crossedas a result of a reduced share base brought

ST ST approval for listing may -

duty duty and infor paid commission) the shares target company acquired during the offer period and the the offer; and making of 6 months prior to the offer must the be in cash or accompanied by cash alternative. a the offeror must make an offer at not than less the highest price (excluding stamp

including the obtaining of the approval of the target company’s shareholders. This done at a general meeting. A majority of can more be is cast thethan of50% required. votes Minimum Price The minimum price is the highest price paid by the offeror or any of the parties acting in (b) Conditions pertaining acceptance, shareholder approval for issue of to new shares and SGX the be attached without Council’s consent. Where level appropriate, a voluntary offer must contain the of terms set out in Appendix 3 (Guidance note on the merger procedures the Code. of of Commission Singapore) of the Competition PartialOffers Voluntary Partial voluntary offers for a specified percentage of the target may be company’s made if equity the shares normally do Councilif so the offer could not the in result consents. It will offeror and its concert parties holding the more voting rights. of 30% or For offers which may result in a holding of 50% or more, the Council will not normally consent unless a number of requirements are satisfied Conditions are also tosubject the thatprinciple all shareholders of the same class of the target company are to be treated equally and fairly. whichtermwouldinA the result of shareholders same class being treated differently would not be acceptable. A voluntary offer also need not be in have a cash alternative cash but must or be in cash or securities or in a combination highest thereof at price the commission) (excluding paid by the offeror stamp or party a concert duty for and acquired shares during the in offer the to offer. making themonthsprior of period the and the target 3 company However when an offeror has acquired (or an offeror and concert acquired) for cash parties 10% or more have of company's thevoting rights during target the together offer period and the 6 months prior to offer the(or when the making Council thinks of it is the otherwise necessary in principle order of equality of treatment), except with to the consent: Council’s give effect to the (a)

over over offer -

over over bid arises. -

ST approval, the ST approval, -

over over offer for the -

over over offer, unlike mandatory a -

market market capitalisation (where the first listed); are second companies and sales; or earnings. assets;     unacceptable unacceptable degree on a subjective interpre- tation of discretion of the offeror nor lie in offeror’s the hands. The Council will normally allow conditions which are based objectively on reasonable the circumstances of each case. Apart Apart from conditions as to acceptance level, SGX shareholder and approval offeror should consult the Council on any other wishesimpose.toitconditions Generally, the fulfilment of conditions attached to an offer must not be dependent to an 50% of the voting rights of the targetcompany. the the of50% voting rights of A voluntary take offer, can be subject to conditions other than the acceptance stipulate an acceptance condition higher (but condition. level.the lower) than not50% It must also already owned by it) even though not obliged the of toCode.9 Rule 14 so do under Conditions It is conditional upon the acting offeror in concert and with parties it acquiring more than A A voluntary offer is a shares of a take company made by an offeror who has not incurred under Rule 14.1. mandatory offer an obligation to make a An offeror may to choose make a general offer for all equity shares in the target company (not principle principle stated agreement and put in and the Code. Notes on of Rule 14.3 call option) Note of the 5 Voluntary Offer (2) (Conditional WhatisOffer? a Voluntary The “relevant price” mandatory depends offer on is when triggered; within the form 3 months the conditional date share of acquisition the agreements put announcement and or call option of such or after announcement. the 3 The months relevant of price be can determined in accordance with the    normally require a mandatory take to be made in such cases company constitutes or unless contributes significantly the second thein the to company aspects: firstfollowing  all such cases to establish whether any obligation to make a mandatory take The Code states that the Council would not

PAGE 10 PAGE 11

ST's ST's rules on minimum -

- - during the offer period (except pursu- if a general meeting is convened, way by of a poll on a resolution separate on the ordinary partial offer. The partial offer must be approved by shareholders (present and voting person or either by proxy) in of more than 50% the of votes or cast; pany pany by the offeror and parties within 12 its months of the close of concert a successful partial offer will be granted normally if such purchases are pro- posedto madethanbemore months 6 theafter partial offer; in the 6 months prior to the date of the offer announcement (and confirms this thefact inannouncement); offer in the period between submitting application the for the Council's thethe of and partial offer; making consent to ant offer); and the partial during a period of 6 months after close the of the partial offer, if the offer becomes partial unconditional as to acceptances. The Council's consent purchases of in shares the offeree com- for

(i) The partial offer is conditional, not only on the specified number acceptances or being received, percentage but also on of approval by the offeree company's shareholders, where the offeror parties acting in concert with it hold 50% or together with less in the offeree announcement company of the prior partial to offer. Where the the offeror together with parties acting concert in with it hold more than 50% of the voting rights of the offeree company, approval by the holders offeree is company's still share- required could if result in the the offeror partial and parties offer acting in concert with it 90%, holding or more the than comply with offeree the SGX company failing free float. The partiesofferor, to acting in concert with it and their associates are not allowed to vote on the partial offer. should be: Voting under under Rule 14; The offeror confirms and undertakes in application for its consent that it and its concert parties did not and any voting will shares (excluding voting not shares acquire acquired by the offeror parties via a rights and issue and/or bonus issue its concert without increasing their centage aggregate shareholdings) per- company: in the offeree (i) (ii) (iii) (iv)

conditional conditional -

conditions are -

conditions, conditions, failing -

conditional conditional voluntary offer -

tions tions are material in the context of transaction. the proposed the offeror has demonstrated reasonable efforts to fulfil the tions condi- within the specified time period; and the circumstances that give rise to the right to rely upon the condi- conditions conditions should be stated clearly conditions should be objective and condition should be relied upon to - - - conditions. conditions. These pre   -   The partial offer is not a mandatory offer no no pre thelapse to cause unless: offer the pre reasonable; the announcement of the pre offer must specify a reasonable period for fulfilment of willthe lapse; which offer and the pre the pre in the conditional offer; announcement of the pre conditional voluntary conditionaloffer voluntary -

than 50% of the company, unless: voting rights of the offeree (a) parties holding shares carrying 30% but not not more than 50% of lessthe voting rights than company the of offeree The Council will not normally consent to a partial which offer could result in the offeror and its concert parties holding shares carrying more offer. The Council will partial normally whichoffer could not result in the offeror consent to a and persons acting in concert with shares carrying it 30% or more of the holding voting rights company. the of offeree The willCouncil not consent to any partial offer which could result in the offeror and its concert Whatisa Offer? Partial Partialthe offersofferssome of are for voluntary thein shares target. The Council's consent is required for any partial (3) Partial Offer (3) d. b. c. tain pre theto subject following: a. offer period. Pre With the 2016 amendments, the announce offeror a may pre where the announcement of a firm intention to make an offer is subject to the fulfilment of cer- concert with it for shares carrying voting rights in the target during the offer period and within 3 months prior to the commencement of the

follow-

for for more than 50% of the voting rights of the offeree company which has not become or been declared tional; and uncondi- for less than 30% of the voting rights of the offeree company which become has or not been declared tional. uncondi-

the restrictions inthe apply restrictions Rule 33.1(b) ing a partial offer for less than 30% voting rights which the of offeree company of the has become or unconditional. been declared wholly In the case of subsequent offers other than (i) (ii) respect of, securities In rights. which theto addition, share- partial offer carry voting holders must be extended newly issued to shares arising from the holders exer- of cise of such instruments, subscription rights the or and offer options period; during the precise number of shares, percentage or proportion offered is stated, and the offer may not be declared unconditional as to acceptances unless acceptances received for less not than that are number, per- or centage proportion. Partial offers may, in respect of each class Shares represented by acceptances in a Any person who intends to make a partial offer for the same offeree company within 12 months from the date of the close of a previous partial offer (whether successful or consent. must Council's not)the prior seek partial offers: the restrictions in Rule 33.1(a) apply following partial offer: a of share capital involved, securities be or in a cash combination or securities. of cash and partial offer should not be acquired by the offeror prior to expiry of Such shares must the be paid for by the partial offeror offer. as soon as possible following expiry of the partial offer but in any event within 10 days the of partial offer's expiry date.

a) b) Generally a partial offer is conditional not only on the number/percentage of received acceptances but shareholders where also offeror parties hold on and 50% or less its of the the the offeree. voting concert rights of approval of Conditions (i) ST ST -

lot shareholdings; - lots in the offeree company's - month month rest mentioned above, to -

cast cast by shareholders not vote are disregarded and excluded for allowed to the purpose of determining sharehold- offer;ers'the partial for approval The partial offer must be approved by shareholders of more than 50% of the votes received. Upon the close of the partial offer, the receiving agent must confirm in writing to the Council that it has done the necessary verification to ensure checks that votes (if any) and if it is on the form the partial offer, ofin a separate box with acceptance for the number of voting shares indicated.

an an appropriate partial offer outstanding is instruments made for convertible rights into, to subscribe for, and options in its acceptance procedure to minimise the number new odd of when a partial offer is pany made with for more a than com- one class share capital, a of comparable offer is equity made class; for each other holdings. Shares tendered in excess of this percentage should be accepted offeror by from each the shareholder in the same proportion as the number tendered to the extent necessary to enable the offeror obtain tothe total of number shares for which he has offered. The offeror should arrange acquire acquire further shares without incurring any offer; to general obligation make a the partial offer is made to all shareholders of the class and arrangements are made for those shareholders who wish to accept in full for the relevant percentage of their the offer document and to theprominent statement that effect contains a specific if the partial offer succeeds, the offeror will be able to exercise statutory control over the offeree company and that the offeror and its concert parties will be free, subject to the 6 to provide a temporary trading counter to trade odd shares after the close of the Such counter partialshould be open for a offer. reasonable period of time, month; than 1 should shorter be not which in any case arrangements arrangements are made with the prior to SGX the posting of the offer document (ii)

(h) (g) (f) (e) holders before the partial offer offeror must theannounce offer on the is date of made, the the shareholders' meeting to approve the partial offer; (d) Where Where approval for a partial obtained offer from has the been offeree company's share-

PAGE 12 PAGE 13

quarters quarters in value of the members -

wants to acquire all the shares or none of them. a scheme of majorityinapproval represent- a number of arrangement requires the ing three or creditors (and of any relevant them) who class are of present and vote either in person or convened by the by court for the purpose of proxy approving at the majority the is scheme. obtained meeting sanctioned and Provided by the the court, it then scheme this becomes isbinding on all members of the class and on substantiallylower majority the A company. is arrangement than that which required is to required invoke the provisions under of Section 215 of the Companies Act a in a tion. compulsory acquisi- scheme In relation Singapore, to of in shareholders circulation outside certain of jurisdictions, to inducing acquireshareholders or dispose documents the of their shares offering is subject to regulation and other to restrictions; depending on the nature of these rules, it may be that a scheme will likelythem;less be to and contravene a scheme may result in where greater certainty the objective of acquire the offeror all is company, to the especially shares where the in offeror the target the mustscheme be by approved a majority in number representing 75% in value of the shareholders or creditors, as the may case be, present person and or voting the toscheme; convened approve either by in proxy at the scheme the must be court; meeting and sanctioned by the a copy of the court order scheme must approving be lodged the with the Registrar of Companies.

Exemptions from Code Exemptions from All schemes of arrangements are tosubject the provisions of the Code. However, the Council (a) (b) Once the court’s order has been passed and lodged at the Regulatory Authority (“ACRA”), this Accounting has the ef- and fect of Corporate immediately and compulsorily transfer- ring 100% control of the target tocompany the bidder. binding To effective be and (a) (b) (c) Advantages an of SOA Some advantages of a takeoveras are bid ment follows: over a scheme of arrange-

fourths fourths or 75% in -

voting, the scheme is passed and the court will proceed to confirm the scheme at subsequent court hearings. to to theseparate meetings hold class approve scheme. But if the scheme of arrangement is approved at the relevant number meetings representing by three value a of majority the in members or class of members classes classes of shareholders creditors, of the and, target company convened by if appropriate, the court. Shareholders connected bidder with are the meetings, precluded from and members attending precluded or the from sufficiently members dissimilar rights it may voting. of be necessary any If class have either receive a cash payment from the offeror, the either cashofferor, a receive from payment incompany. or receiveanother shares isimplemented? Howan SOA A scheme of arrangement is implemented by means of resolutions passed at meetings of scheme scheme of arrangement may provide that all the issued shares in the target company are to be cancelled and new offeror, or shares it may provide issued for the transfer of the to the existing shares to the offeror. In for the cancellation consideration or transfer of their shares in the target company, the shareholders will scheme scheme and scheme. a A creditors' scheme is members' generally used by or shareholders' companies members' scheme is in used to effect corporate reorganisations, financial including mergers. A difficulties. scheme of arrangement A company, would its shareholders involve and the offeror. the A target A A Scheme of Arrangement is a reorganising of a company's capital which is binding on creditors structure and shareholders. or It is carried out itsin withaccordance Section 210 debts the of Act. Companies There are two types of schemes: a creditors' In cases of subsequent offers, Rule 33.1 applies inOffers. to with Delay Subsequent regard Scheme(B) Arrangement of (“SOA”) of WhatisArrangement? a Scheme the offeror or concert with any it for of shares carrying voting the rights in the target parties during the offer period and within acting in 3 months prior to the commencement offer period. of the Subsequent Offers Minimum Price Minimum Price The minimum price is the highest price paid by

ST ST may suspend -

ST ST may allow the target -

under under Section 215, but held the by the remaining public nevertheless shares constitute less than 10% of the total shares in the listed target company or are held by less than members 500 of the announce public, that the trading fact. target of SGX company the announcement. SGX must securities, pursuant company a grace to period of 3 months or more such may be compulsorily acquired under Act. 215 the of Companies Section How If an offeror has, within 4 months of the making of the offer, obtained approval for the transfer of all the shares in the target company to the offeror from company who hold at least shareholders 90% of the shares involved in in the transfer (excluding the already the offer held ator by of by, a date the the shares target nominee for, the offeror or its subsidiary), it may by notice, pursuant Companies to Act, Section require shareholders 215 sell that their shares to of the it on the the terms dissenting of the offer. The notice must level. the be monthsofassent 90% attaining sent within 2 A shareholder compulsorily acquired may whose apply to have court to the shares acquisition stopped. decline are The to court allow will the being proposed proceed acquisition only if to the applicant can the proposed show acquisition that is unfair or not bona fide. In the event that an offeror does not succeed in compulsorily acquiring all the minority shares provisions provisions such withdrawal announcements, of offer, frustration as of offer, those directors’ responsibilities, independent in advice, release of information, relation restriction and disclosure to of contained in dealings, offer documents, information and considerationproxies. settlement of to be With the 2016 amendments, in the scheme case of of a arrangement, the potential deadline for competing a offeror nounce its intentions to either make an who offer or must no bid has an- been revised from the 50th Day to 53rd Day, from the date itsinitial patches document. theoffer first offeror des- (C) Compulsory Acquisition of Minority Holdings Section 215 of the Companies Act When Generally, a whoperson succeeds in acquiring majority control of a company has to no power force minority shareholdings to shareholders him. However, circumstances under to minority some shareholders’ sell shares their

Exemption from Principles of Code Code of Principles Exemption from - in concert with the persons above abstain in from making a (a) recommen- or (b) theand dationscheme; on the which iscompany scheme in the effect target company appoints an independent financial adviser to advise its shareholders the arrangement. on of scheme such persons, their current voting rights the in scheme company rights in the and scheme company and/or new their voting the arrangement; entity of scheme after the common companies directors or the directors who are acting of the scheme the scheme document contains advice to the effect that by voting for the shareholders are scheme, agreeing to such persons and their effective control in the scheme concert company without having to make a general offer for parties the company and discloses acquiring the names of both the scheme companies or (ii) if they together already hold between 30% 50% and of the rights, would increase their voting scheme rights by company’s more than voting 1% in of the voting arrangement; on scheme 6 months, abstain from the scheme of the voting arrangement; on scheme companies abstain from persons and their concert parties who will as a result of the scheme of arrangement (i) acquire 30% or more or in company the or scheme new entity that holds one or Acceptances and delay before acquisition of voting rights in offer abovethe price the scheme company the common substantial shareholders of The requirement to keep offer open for 14 days itisafter revised the offer price Purchases above timetable Offer Mandatory, voluntary and and partial offers Mandatory, voluntary is cashoffer When a required The appropriate convertibles offers to holders of

       Non Schemes of arrangement are from not the exempted General Principles in the Code and (e) (d) (c) (b)  The Council if: provisions the exemptionabove from would normally (a) grant an       may, may, subject to certain conditions, exempt scheme a of the provisions on following: arrangement from the Code’s

PAGE 14 PAGE 15

shares includes shares with -

involve involve cash payment. Notwithstanding safeguards the in Rule 13 of above, that the directors act in Code good faith when to negotiat- ensure there ing break fees and that such break fees should are not constitute the giving of financial assistance by target to offeror in the acquisition of its of the offer period or till the offer consideration has been posted to shareholders, there is also an obligation to provide a cash alternative in this situation. There is also a need to 10% consult or more the of the Council voting if rights of the offeree has been acquired during the offer period or in the 6 months prior to the the commencement offer period and consideration received of by vendor of offeree selling restrictions. Generally, the offeror would typically thethe on Council on valuation consid-basis of consult erationif being isoffered consideration such on a theor securities. of cash alternative form Fees Protection: Break Deal Offerors are allowed to negotiate with break offeree fees subject to the conditions that the break fee will not exceed 1% of the offer value and the confirm financial that the break fee is in the best interest adviser wouldof the offeree need company. This any to applies other also to favourable arrangement offeror with even the if such arrangements do not CONSIDERATION period Settlement With the 2016 amendments, settlement of consideration of the offer is to be within 7 business days after the date of thecalendar stead days. of previous 10 expiry of the offer in- Consideration as Securities Shares acquired in during the offer period exchange or in the 6 months prior for to securities the offer purchases period for will cash be required unless to deemed be the held till the to offer securities period expires be are or the offer consideration has been posted to accepting shareholders. Where purchases carrying 10% of or more of the voting rights shares have been made by of offeror or its concert parties in any exchange for securities during the class offer period and in the 3 months prior to such securities thewill be required offer to be offered to period, thatshares.all ofof class shareholders Unless the securities are to be held till the end

list the

listed. - ST ST may ST ST may - - -

ST. ST. SGX - company. -

listed company, thereby ST ST would also require the - - over (“RTO”) - over over offer for the remaining - list the listed company if a resolu- listed company. The offeror then - - list the listed company has been -

listtargetcompany. the listed by applying to SGX - -

the publicly makes a take shares in the publicly the control ofgaining publicly been revised from the 50th Day from to 53rd the Day, date the first initial offer document. offeror despatches its Reverse(E) Take In an RTO, the offeror exchanges its shares with thereafter with the Act. Companies tothefurther 215E of Section Registrar of Companies With the 2016 amendments, in the case of an amalgamation, the deadline for competing offeror a who potential must announce its tentions in- to either make an offer or no bid has This process involves two or amalgamating more companies company and/or and continuing thereafter company. forming as one a An amalgamation new is to be approved pursuant to Section 215C of general the Companies meeting Act in and a should be registered other classes of listedto other de securities classes be of Amalgamation(D) An amalgamation is effected through Sections toAct. Companies the215A of 215G shares held by the shareholders voting. Before present making a and decision to de listed company, SGX listed company to appoint financial advisor to advise on a reasonable exit an independent alternative, which is normally offered in to its cash, shareholders and to holders of be any agree agree to de tion to de approved, at a general meeting, by a majority of at least 75% in nominal value of held the shares by the shareholders present and such resolution must and not have been voted voting against by 10% or more in nominal value of the the public to 500, de failing which SGX Delisting A listed company de may also choose to be to raise the percentage of the securities held public by to number at of shareholders who least are members of 10% or increase the

ST ST is required to -

increase in the volume of share whether turnover, or not there is a firm make an offer; intention to When negotiations or discussions between the offeror and the offeree company are about to be extended to include more When When thenotification of a firm intention to make an offereeoffer from a serious source. Irrespective of board whether the offeree board views the offer favourably receives or otherwise, it must shareholders inform without its delay. The board the of offeree company must press issue a notice paid or, published where the a announcement; offeror has paid press When, notice, following offeree company, an the an offeree company is approach the subject of rumour or to speculation about the a possible movement in its share price or a significant offer, or there is undue

(c) Following an approach to the board of the offeree company which may or may not lead to an offer, the primary responsibility an for making announcement will normally rest board with of the the offeree board company. should keep The a offeree close watch feree on company's the of- share price and movement. signs of undue volume for The announcement: offeree board (a) must make an (b) A A company listed on the SGX immediately announce any material information relating to it unless would a not reasonable expect person the information closed. to be dis- Alsothe targetis a to required pro- Code under vide the same information that is given to one offeror to any other bona fide or potential offeror. With the 2016 amendments, there needs to be prompt disclosure of (i) any material change to information previously published in connection informa-with material offer; and new (ii) any an tion which would have been disclosed required in to be any nouncement previous published during an document offer period. or In an- any cases of doubt, the SIC should be consulted. Announcements to Company be made by Before Offeree the board of the approached, offeree the company responsibility is for making announcement an will normally rest with feror or offeror. potential the of-

manager manager manager, manager, - -

ST, ST, the Council and the manager or the offeree

- -

discretionary discretionary investment -

regarded as a dealing in securities. regarded dealing a relevant as Dealings for clients should be non Council. privately disclosed to the It is clear that the taking, granting, acquisition, disposal, exercising (by either party), closing out or variation of an whetheroption, in lapsing, respect of new or existing acquisition securities, of, disposal of, entering and into, closing the out, exercise (by either party) of any rights under, or issue or variation of, a derivative will be Code Code to disclose any dealings in the securities relevant to the SGX press. Dealings in securities are extended to dealings in derivatives. sharing available and management forecasts with the projections independent adviser. financial Announcements Disclosures and During the offer period, the parties to over a take- and their associates are required by the REIT and itsmanager. REIT and However, with the 2016 amendments, there is now clarification that (i) soliciting a competing offer or running toamount frustration of an existing offer and (ii) a sale directors of the may offeree company consider process does not trustee trustee of the REIT (in its capacity as trustee of such offeree REIT). Certain matters been have spelt out as also prohibited action unless carried out with the prior approval of and unitholders these actions terms include of the engagement alteration between trust of the and business the trustee In the case of an trust offeree or registered business business trust, by the and/or trustee the directors of and the in the case trustee of an offeree REIT, no frustrating action by the manager and/or any of the directors of the manager of the REIT the and/or contract entered into earlier, take any action, without the approval general meeting, of on the affairs shareholders of the offeree company at that could a effectively result bona in any fide shareholders being offer denied an opportunity being itsmerits. on decide to frustrated or the The Code prevents directors of the offeree The from directors prevents Code of frustrating a takeover offer. In the course of an offer, or even before the date the of board the of the offer, offeree company ifhas reason to believe that a bona fide offer the is imminent, board must not, except pursuant to a shares. of Offer Frustration No

PAGE 16 PAGE 17

over over or merger -

ST, ST, the Council and the

- over over offer must be publicly -

tance thetance of offer. ultimate controlling shareholder of the offeror); Details of any existing holding of securities which are being offered for or which carry voting rights, or convertible securities, warrants, options or derivatives in securities respect which of are being which offered for carry or voting company rights which the offeror in or any the person acting in concert with offeree him owns or controls or in respect of which person the offeror acting or any in received concert an with irrevocable commitment theaccept offer; him to has whichthe is offerAll toconditions subject; Details of any arrangement in shares relation to of the offeror to material and themight which be offer; or target company In the case of a mandatory offer or a voluntary inoffer cash with or a cash element, the announcement must include conditional an confirmation un- by thefinancial adviser, offeror’s or another third appropriate party, that thetoavailableto offeror satisfy full accep- financial resources are The terms of theterms The offer; of where theidentityappli- The offeror (and of cable, the identity of the ultimate offeror or

There There is a requirement for disclosure in the offer announcement the number and percentage of any relevant securities in the pany which offeree the offeror com- or any person acting in withit concert has: (c) (d) (e) (f) Dealings in Shares of Offeror and Target Target of in Offeror Shares Dealings and Rule 12 of the Code provides for disclosure dealings of in the shares of target the offeror and company the Generally, during parties to the transaction a take and offer their associates period. deal are in free shares to company, of for the their offeror they own or make the account, the target provided under relevant Rule 12 disclosures to SGX required press, and subject to compliance with the laws to relatingmust insider disclosures Such dealing. the day. dealing on next made beby noon Offeror Disclosure Requirements As soon as the offeror has make a firm intention a to in thethe newspapers. offeror by announced take The public announcement by the offeror must disclose: (a) (b)

prescribed noti- -

ST. ST. - potential purchasers or to about approached. be offerors are the company is the subject of rumour or speculation about a possible offer, or there is undue inmovement its share price or a significant or turnover; volume share of increase in the more than a very restricted number of

prescribed prescribed notification form to the - that there are negotiations or between discussions a holder, or holders, of shares carrying potential 30% or offeror more of the voting and rights of a company or the when the board of a company is seeking and: potential offerors, than a very restricted number of people; or of than number a restricted very When the board of a company is aware (i) (ii)

the shareholding situation tochange, disclosed. be before and after The MAS prescribed form provides for information such as name of substantial shareholder or director, reason change, date of becoming aware for of change, number notification, of securities date the consideration, subject circumstances of of of change, change, and fications fications received from substantial shareholders and directors as soon as possible and not later than the end of Substantial the shareholders following and directors business are day. longer no required to separately report their interests, and changes in interests, inthe SGX securities to votes attached thein shares)treasury(excludingcompany. to all the All notification requirements in voting respect of inter- shares ests in listed companies dated in have the SFA. been A listed consoli- issuer is disseminate on SGXNET all MAS required to Under Under Section 2 shareholder” is a of person who has an interest or the SFA, interests a “substantial in (excluding treasury one shares) and in the or total votes the attached to that company more share those or shares is voting not less than shares 5% of the total company company of his interest within 2 business days after becoming aware substantial of shareholder. his Any changesinterest becoming in a of the likewise be a notified in a prescribed notification substantial form within 2 business shareholder days (see Section 136 of must the SFA). Substantial Shareholder Substantial Under Section 135 the of a SFA, person who is a substantial shareholder must give notice MAS in a (d)

pulsory pulsory acquisition; A statement as to agreement, arrangement or understanding whether there is between any the offeror or any person acting in concert with it, and any of the directors or recent directors or shareholders or re- change change in the financial pects position of or pros- the target date of the last balance sheet company laid before since the the company in general meeting and if so, change; suchparticularsof any Where the offeror is a mate subsidiary, holding the company will ulti- normally have to disclose the prescribed information on a consolidated basis in the offer document. The Council may withdispense this requirement if the subsidiary in question is of sufficient substance in relation the and offer; to the group The price or securities; paidtargetcompany’s the other for considerations to be All conditions attached to and in whether theparticular is acceptances, offer conditional upon acceptances being received in respect of a minimum number of securities or percentage of shares, and if so, that number of securities shares and the last day or on which the offer percentage unconditional; can become of A statement whether or not the offeror intends to avail itself of the powers of com- liabilities shown in the ditedaccounts; last published au- Particulars of all publicly changes known in material the financial company subsequent to the last position published of the audited accounts or there are no such a publicly known material statement changes; that Similar details from any interim on preliminary statement announcement made since the last published withaccounts; the audited audited accounts, as Significant accounting policies with any points together from the notes of counts the which ac- are of major interpretationtheof accounts; relevance for Where, because of a change in accounting policy, figures are not tocomparable a material extent, this should and the approximate be amount of the disclosed resul- tant stated; be should variation Whether or not there has been, within the knowledge of the offeror, any material

(19) (15) (16) (17) (18) (10) (11) (12) (13) (14)

lent or sold) or lent to an- -

term term commercial justification for

lent or or sold);

- over, over, exceptional items, net profit before and after or tax, minority interests, loss net earnings per share, net dividends per share together with a statement of assets and The names, descriptions and addresses of alldirectors;the offeror’s summary itsprincipalofA activities; Details for the last 3 financial years, of turn- of the target company during the period 6 months prior to the beginning of the offer period with and ending the latest practicable date prior to the posting Document, of the details, Offer including prices of such if dealings and no such deal- dates and ings were made, a statement fect; to that ef- If the offeror has dealt in the shareholdings Its intentions with regard to continued em- ployment of employees of the target com- its panyand subsidiaries; The shareholdings of the offeror in the targetcompany; The offeror’s intentions regarding major any changes to be introduced in that business, including any redeployment of fixed assets targetthe of company; The long the offer; The offeror’s intentions regarding the busi- targetcompany;theness of borrowed borrowed from another person (excluding borrowed securities on which have been lenttoperson. another granted granted a security interest to another person, whether through a charge, pledge or otherwise;

(7) (8) (9) charge, pledge or otherwise, or borrowed from another person (excluding which have been on borrowed shares other person, such made. disclosures must also be (6) The definition of shareholdings purposes includes derivatives for (apart from con- disclosure vertible securities, warrants and options which already required disclosure previously). Where any shareholdings have been made the ject sub- of a security interest, whether through a (4) (5) (2) (3) The offer whichdocument must be dispatched by, or on behalf of, the offeror to shareholders of the target company must include, inter alia, the following: (1) (b) (c) (a)

PAGE 18 PAGE 19

The latest closing the price on practicable date prior to the publication of the Offer Document; Where announced the the closing price latest on offer business the day ceding immediately was pre- the date the of offer; nouncement publicly of the initial The closing an- price at the end of each of the 6 calendar months preceding the initialand the date announcement; of during the period between the start of 6 months preceding the initial date of announcement the and practicable date prior to the theposting of latest the offer document and the respective thedates of relevant sales;

the statement should contain all information which the offeror may have as to the number, amount and price at securities which may the have been sold during the period between the start of the 6 immediately months preceding the initial date announcement and the latest practi- of the Where Where the offeror’s securities are or quoted dealt in or on a stock exchange, this should be fact stated. The following information included: shouldbe also (i) (ii) (iii) (iv) The highest and lowest closing prices Where the quoted offeror’s or dealt in on securities a stock exchange, are not be declared The nature and particulars of the offeror’s business; The date and country theof incor-offeror’s poration; The address of its principal office in Singa- pore; The authorised and issued and the rights share of the offeror’s capital shareholders capital, inand ofvoting; dividends respect Whether the shares offered will passu with the rank existing issued pari shares of the offeror, and if not, a precise description of how the shares will rank for dividends and capital; The number of shares issued since the end thelastthe ofofferor; year of financial

(g) (h) Where Where the transaction involves an exchange of securities, the offer document must, in addition to providing for the above, contain the following: (a) (b) (c) (d) (e) (f)

ST ST the of secu- -

Details the of whichsecurities for the isoffer made and a statement whether they are to be acquired cum or ex any dividend or other distribution which has been or may ing the period between the start of months the 6 preceding the date announcement of and the the latest practicable initial date prior to the posting of the Offer Docu- ment and the respective dates of the relevant sales; and Document, Document, on the latest business day im-mediately preceding the date of the initial announcement of the offer and at the end of each 6 calendar months preceding the initialthe date announcement; of The highest and lowest closing prices dur- and and particulars of all securities in the target company held by such persons, or a state- held; mentsecurities thatsuch are no The closingtheprice on SGX rities of the target whichcompany are subject of the offer on the latest date practicable prior to the publication of the Offer be included;be A statement as whetherto or not any securities acquired pursuant to the offer will be transferred to any other persons, together with the names of the parties to any such agreement, arrangement or understanding Where Where the offer is for cash or element includes of an cash, an unconditional confirmation by the offeror’s financial adviser, or another appropriate third party, that financial resources are available to the offeror to satisfy full acceptance of the offer must Except in the case of solely cash, a an statement whether on and in offeror offering what manner the total emoluments of the willdirectors the of offeror inbe con- varied sequence of the acquisition of the company target or in transaction; any associated relevant rangement rangement or understanding together with the particulars of all securities in the target company held by such persons, or a statement that no such securities are held, and particulars of all which securities will or may transferred;be any such agreement, arrangement or understanding; A statement as to whether acquired pursuant any to the offer will trans-be securities ferred to any other person, and the names of the parties to any such agreement, ar- cent shareholders of the target company, having any connection with ence upon or the offer, and full depend- particulars of

(26) (25) (24) (23) (22) (21) (20)

or or informal, of whatever nature relating to the relevant securities which to may deal dealing. or inducement refrain from be an The inshareholdings the offeror (in the case of a securities exchange offer only) and in the target company in which directors interested; are the offeror of The inshareholdings the offeror (in the case of a securities exchange offer only) and in the targetwhich company any person act- ingwithin the concert Offeror ownsor controls the acting persons such(with of names in concert); The inshareholdings the offeror (in the case of a securities exchange offer only) and in the target company owned or controlled by any persons who, prior to the posting of irrevocablycom- the have offer document, mitted themselves to accept the offer together with the names and of such persons; The inshareholdings the offeror (in the case of a securities exchange the offer target only) company and owned or controlled by a person with whom the offeror or any person acting in concert with has the any indemnity or offeror option arrangements or any or agreement understanding, formal

(o) (p) (q) (r)

the securities willtheissued; securities be into with an interested than 3 person years before the not date of the more Offer, not being a contract entered ordinary into course in of the the business carried on the offeror; to on or carried intended be by How and when the documents of title to contingent contingent liabilities of the offeror and any of its subsidiaries, or, if there that liabilities to effect; statement a are no such Details of any material litigation is,party; tomay a the become, or offeror which Details of every material contract entered Details of any of reorganisation capital during the 3 the date financialoffer; of years preceding the Details of any bank overdrafts or loans, or any other similar indebtedness, mortgages, charges or guarantees or other material fect should be made; fectbe should Details of the outstanding vertible, securities into rights to con- subscribe for and options in respect of thein offeror; voting rights affecting shares securities which carry cable date prior to the publication of the offer document and if the offeror such has information, no a statement to that ef-

(n) (l) (m) (j) (k) (i)

PAGE 20 PAGE 21 ST ST on on -

ST -

or interested in,

itionally, following which are granted

Notes on dispensa- Notes on dispensa- will not be granted if dispensation from Rule

egranted

OVER OFFER

Event

over threshold will also be subject to the mandatory - of the offer shares under section 215(1) Com- 215(1) section under shares offer the of

. willlapse. offer the which failing ,

, failing which the offer willlapse offer the which failing , Com- (1) 215 section under notices acquisition compulsory

to commence compulsory acquisition procedures acquisition compulsory commence to

recommendation recommendation of the independent directors and the advice of

Last day for fulfillment of other conditions if offer unconditional as to as unconditional if offer conditions other of fulfillment for day Last 60 on Day acceptances 90% acquiring for date Final Act panies for date Final Act. panies patch of the offer document. offer the of patch acceptances. of level of Announcement information new material announce can company target that date Last etc). (results, accep- to as unconditional still offer if withdrawn be may Acceptances tances. offer revised for day Last to as unconditional declared or be to become offer for day Last acceptances uncondi- became offer (assuming close can offer which on date Earliest 60). Day on acceptances to as tional (if the Target Company is a listed company) on the same day. same the on company) listed isa Company the Target (if Target company the to share- the to company target the of advisers financial independent the send company. target the of holders the offeree The offeree circular circular must be lodged with the Council and SGX dispatch. containing of date the date: closing First The closing date of the offer will be as stated in but the the offer document, offer must initially be open for at least 28 days after the dis- Public announcement of offer by offeror. by offer of announcement Public Offer. of company target by announcement Holding company. target the to Document Offer the dispatch to Offeror SGX and Council the with lodged be to Document Offer the of Copy

SPECIMEN TIME TABLEFOR A TAKE

D 21 21 - - Date

D D+14 D D+74 D+81 D+39 D+42 D+46 D+60 D+28 ("D day") ("D over offer obligation

- D+4 months D+4 D+6 months D+6 at the time the security was foreclosure,given theany lenderpurchaser had from reason the taketo lender believe who that crosses foreclosurethe wastake likely. Add Refer to Note 3 in the Notes on pursuantDispensationto this exception.from Rule 14 for the conditions which apply to waivers Appendix3 paragraph 1 Refer to Note 1 (Vote of independent shareholder on tion the fromissue Ruleof new14 securitiesdefines “Whitewash”)“Independent ofvote” the the transactionto meanin question a vote by shareholders who are not involved in,Refer to Note 1 (Vote of independent shareholder tiononfrom Rule the 14 issueforthe situationsof newin which securitieswaivers pursuant“Whitewash”) tothis exceptionin the will notnormally b Refer to Note 2 (Enforcement or foreclosure of 14 securityfor the forconditions a loan,which applyreceivers, to waiversetc.) whichin arethe grantedNotes pursuanton to this exception. A waiver By 8.00 a.m. on D+29

5 1 2 3 4 Endnotes

m und und

46th 46th s s lower

OVER OFFER IN

Event

round. Revised offers announced in this round must be be must this round in announced offers Revised round.

COMPETITIVE SITUATIONS Last day for offer to become or be declared unconditional as to as unconditional declared or be to become offer for day Last acceptances 5.00pm on this day. this on 5.00pm 4 Day Auction if 4, Day Auction on offer revised a announce may offeror competing A 3. Day on Auction offer revised a announced offeror competing other the at willend procedure auction the isannounced, offer revised such Ifno day. this on 5.00pm 5 Day Auction Auction on offer revised a announce to permitted offeror competing Ifa a announce may offerors competing the of both or either so, does 4 Day will procedure auction the event, In any 5. Day Auction on offer revised 5. Day on Auction 5.00pm at end documents offer revised to post offerors competing for day Last 5) Day was Auction auction of day last (assuming Auction procedure commences and both offerors can announce a re- announce can offerors both and commences procedure Auction in 1 offer vised unconditional. the 1, Day Auction on offer revised a announces offeror competing Ifno this day. on 5.00pm at will end procedure auction 2 Day Auction if 2, Day Auction on offer revised a announce may offeror competing A 1. Day on Auction offer revised a announced offeror competing other the at willend procedure auction the isannounced, offer revised such Ifno day. this on 5.00pm 3 Day Auction if 3, Day Auction on offer revised a announce may offeror competing A 2. Day on Auction offer revised a announced offeror competing other the at willend procedure auction the isannounced, offer revised such Ifno Last day for revised offer; revised for day Last alter- no and 46 Day on 5.00pm at exist to continues offer competitive Ifa the offerors, competing the between agreed been has procedure native offeror competing the Council., the and company offeree the of board Pro- withAuction the in accordance only offer a revised announce may cedure. 1: Day Auction

SPECIMEN TIME TABLEFOR A TAKE Date D+58 D+72 D+51 D+50 D+48 D+49 D+47 D+46

the competing offerors may become or be declared unconditional the documents. revised days the offer afterof posting as to acceptances will be 14 end of the auction procedure at 5.00pm on any of ended. thethat auction has procedure confirming nouncement the Auction Days 1 to 5, SIC will make an an- Competing offerors are usually required to post their revised offer documents after the end the of withauction. may The alsoSIC the no dispense for a competing requirement offeror later than 7 days to post its revised offer document, if it is clear that the value of the competing offeror’s offer i than the value of the other competing offeror’s offer. The latest date in which either offer made by by the timetable established by despatch of the offer document of the latest competing offeror. latesttheofferor. competing of the document of offer established timetablebyby thedespatch For a contractual offer, the deadline for a potential competing offeror who must itsannounce inten- tionsto eithermake or an no offer bid since has the been revised from theto 50th Day fro Day 53rd itsinitial thethe offer offeror firstdespatches document. date Where there are competing offers and if neither offeror has declared its final offer price till theday following the positing of the offer document, an auction willprocedure be prescribed. After the COMPETING OFFERS With the 2016 amendments, there is now greater certainty on the applicable procedures and time- lines where there are competing offers. In cases of competing offers, all existing willoffers be bo

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OVER 2013 - considered considered “reasonable” if it is assessed to be an Hence, that “fair”. opinion an offer is “fair but not reasonable” given should unless not there are be strong and excep- grounds. tional Following Following the transaction, the SIC issued a practice statement on fair and reasonable statements by IFAs. The term “fair and reasonable” should be regarded as compris- ing two distinct concepts. The term “fair” relates to an opinion on the value offer of the price or against the value of consideration the securities subject compared to the offer (the “Offeree Securities”). An offer is “fair” if the price offered is equal to or greater than the value of Securities. In the whether considering an offer Offeree is “reasonable”, the IFA Offeree the value of the other than matters should consider Securities. Such matters include, not but limited are to, the existing voting rights the in offeree company held by the offeror and its concert parties and the market this Under Securities. Offeree of the quidity li- approach, an offer can be “fair and reasonable”, “not fair but reasonable”, fair “not and not reasonable” or “fair reasonable”. In but all cases, not the IFA must ex- plain clearly the bases for While the opinion its “fair but not reasonable” conclusion. is not ruled out, an offer would normally be but not reasonable, from a financial point view. of factor A into account JP Morgan took was the fact that the Kirin F&B Offer was a ne- gotiated sale (rather than an auction) which F&N in had not an opportunity to par- ticipate in negotiations or to seek alterna- tives. As such, the Kirin F&B Offer price for the F&B Business was not derived market from check a involving F&N, for pose the of value maximizing to F&N. The inde- pur- pendent financial adviser that a since seller, not a F&N was distressed further noted price discovery method for the F&B assets would be practicable as part ough of a market thor- check. also Consideration given was by the adviser independent to financial the fact that F&N shareholders who continue to remain invested could in potentially F&N see, under the terms the of Kirin F&B proceeds. of use defined a without Offer, a major asset sold led led bid, - agreed agreed between -

CASE STUDY: F&N TAKE

cial cial adviser (IFA), JP Morgan, formed opinion the that the terms made by of Kirin for the the F&B assets F&B were fair offer purposes purposes of the Code, subject to the inde- adviser to the financial pendent independent directors of F&N publicly stating that in of their Offer opinion the Kirin the F&B terms reasonable. and are fair It eventuated that the independent finan- shareholders' shareholders' meeting relating to approval sale. of the The SIC had earlier arrangements confirmed between OUE Baytown and that such Kirin did not special constitute deals for the OUE Baytown, on its part, had undertaken to Kirin that higher offer for the subject F&B Business cer- (within to there tain being parameters), it shall no vote in favour of the sale of the F&B Business to Kirin in F&N (“F&B (“F&B Business”), at a price of S$2.7 billion and on other terms pre Kirin and the OUE Baytown. The Offer Kirin shall be F&B capable of acceptance by F&N upon the OfferOUE uncon- becoming ditional. ment, ment, had provided OUE the accept it would that Baytown OUE an undertaking to offer, and would not accept any competing offer. Kirin had also provided an undertaking to OUE Baytown that it would make a binding offer to F&N to acquire the food and beverage business of the F&N group on on 15 November 2012 at share. $9.08 The OUE offer per had 2 F&N special tures. fea- The first special feature Limited was Company, Holdings Kirin party, third that a ("Kirin"), which held a 14.8% interest in F&N at the time of the OUE offer announce- TCC TCC Assets announced a mandatory offer on 13 September 2012 at share, $8.88 which per closing F&N date was multiple times. Prior to extended the close of the TCC $8.88 offer, the offeror in the OUE OUE a announced Baytown voluntary offer 2013, 2013, by Thai group TCC Assets, facing off an earlier competitive bid from a consor- tium led by property developer Overseas Union Enterprise (“OUE”), mention, given the unusual merits features in the special bids. The successful conclusion to the takeover of Fraser & Neave Limited ("F&N") in early

The breakthrough to resolution of the two competing bids oncame 18 January 2013, when TCC Assets revised its offer price for F&N shares to $9.55 (from $8.88 previously), which was not counterbid town, whose original and by offer unchanged OUE Bay- at $9.08 lapsed on 21 January 2013, with- unconditional. out turning Similar to the auction procedure adopted for F&N, the 2016 amendments have provided for the Auction aforementioned Procedure, which Modified is designed achieve to finality and an orderly conclusion to a competitive situation in an open and manner. transparent The had aSIC issued earlier ruling that such a break fee arrangement was in ance compli- with Rule 13 (on Break Code. Fee) of the F&N stressed that the break fee was not to be construed as a positive recommenda- nor board, F&N by the Offer OUE of tion the is the minimum offer price Share to of be construed S$9.08 as a per statement by price was an offer such that the F&N board fair and reasonable. F&N explained the that break fee place arrangement in order to create a competitive bid was put in situation, thereby maximising value for shareholders. its The other feature of the takeover bids by TCC andAssets OUE Baytown was that the Council felt fit, in the interests, inter alia, of providing certainty to F&N shareholders in making a decision on the two competing bids, to set out its own auction procedure bids. for the two

fer fer at any time before (i) the despatch of the offer document, or (ii) the closing date offer. of the to continue. The break fee would not be payable, inter OUE of the alia, if, after the announcement Offer, OUE Baytown withdraws or vented from proceeding with is the OUE Of- pre- OUE OUE offer) for the F&N Shares at or above is declared or becomes offer price the OUE unconditional as to acceptances within 85 calendar days from the date of or period longer such Offer the announcement OUE that the Council may allow the other offer in connection with the making of the OUE Offer, subject to a of maximum S$50 million and the operation of a reduction mechanism. The break fee would be event that payable a in general offer the (not being the The second special feature of the OUE offer was that F&N agreed to pay OUE Bay- town a break fee equal to the costs expenses reasonably incurred in and respect of its legal and financial advisers and lenders well. In the OUE case, the even though the Kirin OUE F&B offer terms were offer survived advised by JP Morgan to be reasonable. fair but not that that in structuring future commercial deals, one key consideration whether such should side mutual deals undertakings be between (such OUE town as and Bay- Kirin) should the be intricately into the offer, or built not, such that, without the side deal, the larger bid exercise fails as However, However, the broader lesson from JPMor- gan's conclusion in the OUE offer case is

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01, -

Bill JAMIESON JAMIESON Bill Partner [email protected] 8680 +65 6349

Singapore 188778 Singapore 8383 +65 T: 6323 8282 +65 6323 F: E: [email protected] www.cnplaw.com Colin Ng & Partners LLP Partners & Colin Ng #13 Road, Bridge North 600 2), (Parkview Square Parkview CONTACT DETAILS CONTACT