THAILAND Law and Practice Contributed by: Sunyaluck Chaikajornwat, Chumpicha Vivitasevi, Pratumporn Somboonpoonpol and Threenuch Semaming, Weerawong, Chinnavat & Partners Ltd
6.6 Requirement to Obtain Financing A privately negotiated transaction may be contingent on the availability of financing. However, a tender offer (whether mandatory or voluntary) cannot be subject to the financing condition, as the tender offer rules require the offeror to provide the SEC with information and evidence related to the sources of funds used by the offeror for the takeover. 6.7 Types of Deal Security Measures Security measures such as break fees, non-solicita - tion provisions, and non-disclosure and confidentiality provisions are among the most commonly employed measures to ensure deal certainty. 6.8 Additional Governance Rights Minority shareholders may protect their position in a shareholders’ agreement. However, care should be taken to ensure that a concert party relationship is not created between the parties to the shareholders’ agreement. Partial tender offers can only be made with the approv - al of a shareholders’ resolution of the target and SEC approval. In addition, the offer must be made for less than 50% of the total voting rights of the target. 6.9 Voting by Proxy Shareholders may vote by proxy in Thailand. 6.10 Squeeze-Out Mechanisms There is no squeeze-out mechanism under Thai law. In practice, after the completion of a tender offer, there remains a small number of shareholders who cannot be traced or who have refused to sell. As long as these shareholders still hold shares in the target, delisting may not be possible, and the basic rights of these shareholders must be respected. These rights include receiving notice of, attending, speaking at and voting in general shareholders’ meetings. If, following the completion of a tender offer, a resolu - tion to delist the target’s securities from the SET is passed, such resolution requires the total number of votes of the shareholders to be not less than 75% of the total number of issued and paid-up shares, with no shareholders exceeding 10% of the target’s issued
and paid-up shares objecting to the delisting. Also, the delisting is subject to approval by the SET. The passing of such resolution triggers a mandatory offer to the dissenting minority shareholders. There are statutory provisions that determine the price at which this delisting tender offer must be made. 6.11 Irrevocable Commitments It is common for a potential acquirer to enter into an agreement to tender with principal shareholders. Since a squeeze-out mechanism does not exist, the potential acquirer normally commences negotiations and concludes agreements with principal sharehold - ers prior to conducting the tender offer. Once an agreement is entered into, there is no exit mechanism for the shareholders unless the parties agree other - wise. However, the enforceability of these agreements remains debatable, as tender offer regulations allow an accepting shareholder to withdraw their accept - ance within a specified period. A bid must be made public when the acquirer trig - gers the minimum tender offer thresholds (ie, at 25%, 50% and 75% of total voting rights) by submitting a statement of intention to make a tender offer on Form 247-3 to the SEC within one business day after such triggering. In the case of a voluntary tender offer, the bidder is required to submit a statement of intention to make a tender offer on Form 247-3 to the SEC within three business days after announcing the tender offer, unless the bidder has already submitted Form 247-4 within such period. A tender offer will be deemed to have been announced in certain circumstances, such as when the bidder notifies the directors of the target company or shareholders holding 10% or more of the total voting rights of the target. If it fails to file the form within this timeframe, it will be deemed to have announced an intention not to make a tender offer, meaning that it will be unable to proceed with a tender offer for one year. 7. Disclosure 7.1 Making a Bid Public
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