THAILAND Law and Practice Contributed by: Sunyaluck Chaikajornwat, Chumpicha Vivitasevi, Pratumporn Somboonpoonpol and Threenuch Semaming, Weerawong, Chinnavat & Partners Ltd
4.5 Filing/Reporting Obligations Generally, disclosure of derivative transactions is not required under securities disclosure laws. How - ever, exceptions apply in cases where the derivative is based on the shares of a listed company. In such instances, any acquisition or disposal by directors, management, auditors or individuals or entities con - nected thereto must be disclosed. Currently, there are no specific provisions on deriva - tive transactions for competition purposes. Whether the acquisition of derivatives will be subject to a pre- filing/notification obligation under the TCA depends on the transaction structure. For example, if the clos - ing of a derivatives transaction does not result in any transfer of the underlying shares, such transaction will not trigger merger clearance in Thailand. 4.6 Transparency Shareholders are required to disclose the purpose of their acquisition and their intentions regarding control of the company. As a general rule, the SET Information Disclosure Guidelines require the disclosure of a deal only when it is confirmed. Therefore, in practice, a listed com - pany should disclose the deal once a definitive agree - ment is signed. However, there are exceptions where a company may disclose such information prematurely, such as if incorrect information that could affect the stock price is leaked to the public. Furthermore, the following circumstances constitute exceptions where a listed company is not required to immediately disclose information to the public, provided that the listed company is able to maintain complete confidentiality: 5. Negotiation Phase 5.1 Requirement to Disclose a Deal • when immediate disclosure would adversely affect the listed company’s ability to achieve its business objectives; • when the facts are in a state of change and appro - priate timing of disclosure is necessary; or
• when immediate disclosure would provide a signifi - cant advantage to the listed company’s competi - tors. Any use of undisclosed material information for the purpose of trading in the company’s securities may give rise to insider trading liabilities under the relevant securities laws. 5.2 Market Practice on Timing Market practice on the timing of disclosure is generally aligned with and does not differ from the applicable legal requirements. In practice, market participants comply with the statutory timelines prescribed under the relevant securities and takeover regulations. 5.3 Scope of Due Diligence Full-scale due diligence – including legal, financial, accounting, tax, HR, environmental and other relevant areas – is generally conducted in private M&A trans - actions in Thailand. However, in competitive auction processes or transactions involving time constraints, acquirers may adopt a more limited due diligence approach focused on material aspects such as legal, tax and financial due diligence only. In some cases, involving the acquisition of shares in a listed company, the seller may insist that the acquirer simply rely on publicly available information and dis - closures made through the SET and the SEC. 5.4 Standstills or Exclusivity Standstill and exclusivity arrangements are commonly negotiated during the preliminary stages of a transac - tion. Sellers typically seek exclusivity commitments to secure deal certainty during due diligence and docu - mentation, while standstill provisions may be used to prevent unsolicited share accumulations or competing bids during negotiations. 5.5 Definitive Agreements Tender offer terms are not commonly documented in a definitive agreement. If a tender offer is triggered by the acquisition of a controlling shareholding, the terms of the tender offer are purely a matter for the acquirer, as the tender offer will occur after the closing of the sale of the controlling shareholder has occurred.
1306 CHAMBERS.COM
Powered by FlippingBook