THAILAND Law and Practice Contributed by: Sunyaluck Chaikajornwat, Chumpicha Vivitasevi, Pratumporn Somboonpoonpol and Threenuch Semaming, Weerawong, Chinnavat & Partners Ltd
6. Structuring 6.1 Length of Process for Acquisition/Sale There is no fixed rule regarding the time it takes to acquire or sell a business in Thailand. A controlling stake may be sold relatively quickly if the selling shareholder is able to dictate the terms under which acquirers purchase its holding, such as by restricting due diligence and offering limited representations and warranties or setting minimal conditions precedent. Once the sale of a controlling stake has occurred, if a tender offer is triggered, the tender offer must remain open for between 25 and 45 consecutive business days, although this timetable can be extended if a competing bidder emerges. Conditions can be speci - fied for making a voluntary tender offer (as opposed to a mandatory tender offer), such as requiring regulatory approval, but these conditions must be satisfied with - in one year of the announcement. In addition, a volun - tary tender offer may include a minimum acceptance condition, allowing the offeror to cancel the offer if, upon expiry of the offer period, the number of shares tendered is less than the minimum number of shares specified by the offeror as a condition of the purchase. 6.2 Mandatory Offer Threshold Under securities regulations, an acquirer must make a tender offer for all shares and, subject to certain exceptions, equity-linked securities of a target com - pany upon acquiring 25%, 50% or 75% of the total voting rights of a listed target company. Acquisitions by the acquirer, its related persons and its concert parties, and their related persons, are aggregated for this purpose in accordance with the Notification of the Capital Market Supervisory Board. A mandatory tender offer may be triggered not only by the direct acquisition of shares in the target, but also by acquiring shares in an intermediate or ultimate holding company that controls the target. Control may arise where a person or juristic person: • holds shares carrying 50% or more of the total vot - ing rights in a juristic person that is a shareholder of the target, or in juristic persons holding shares consecutively at each level of the chain up to such shareholder; or
• appoints, or acts to appoint, a significant number of directors to control the management or opera - tions of such juristic person or the target (under the
chain principal rule). 6.3 Consideration
Cash is the most commonly used form of consid - eration in business combinations. In takeover offers, alternative forms of consideration may be offered, but one must be cash. 6.4 Common Conditions for a Takeover Offer There are two types of tender offers. Firstly, there is a “mandatory” tender offer, which is triggered once the acquirer acquires 25%, 50% or 75% of the total voting rights of the target company. The mandatory tender offer must be unconditional as to the level of acceptances and must offer to buy all the remain - ing shares of the target company. Secondly, there is a “voluntary” tender offer, in which the acquirer may set an acceptance condition, usually a minimum per - centage of shares they wish to acquire. In this case, if the acquirer makes the tender offer, but the number of shares falls short of the minimum percentage, the acquirer may withdraw the tender offer. In addition, a voluntary tender offer may be structured as a conditional voluntary tender offer, whereby con - ditions shall be satisfied prior to the commencement of the tender offer. In the case of any tender offer, an offeror may cancel the offer if an event or action occurs after the offer document has been filed with the SEC but during the offer period, which causes or may cause serious damage to the status or assets of the offeree’s business, and the act or event is not a result of the offeror’s actions or any act for which they are responsible. However, the right to cancel must be explicitly stated in the offer document. It is common to include a material adverse change condition in a voluntary tender offer. 6.5 Minimum Acceptance Conditions The minimum acceptance condition is usually set at a specific percentage of the total voting rights. The rel - evant control threshold in Thailand is more than 50% of the total voting rights. However, an acceptance condition is only available in a voluntary tender offer.
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