SINGAPORE Law and Practice Contributed by: Evelyn Wee, Sandy Foo, Tracy-Anne Ang, Terence Quek, Hoon Chi Tern, Goh Jun Yi and Tricia Teo, Rajah & Tann Singapore LLP
• the board of the target public company recom - mending to the shareholders that they should
• the body corporate is, or a majority of its directors are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the offeror or Excluded Persons. Acquisitions of the listed company’s shares outside the general offer may be counted towards the 90% squeeze-out threshold, provided that: • these acquisitions are made during the period when the general offer is open for acceptances, up to the close of the general offer; • the acquisition price does not exceed the offer price; or • the offer price is revised to match or exceed the acquisition price. If a bidder fails to achieve the squeeze-out thresh - olds, its ability to seek additional governance rights will depend on whether it can at least achieve del - isting of the target. Otherwise, listing rules may be restrictive in respect of additional governance rules. In the context of a public takeover offer, no additional rights are granted to a shareholder by reason of a significant shareholding. Debt pushdown will also be more difficult as long as the target remains a public company (ie, one with more than 50 shareholders) as there are legislative provisions which prohibit a target from providing financial assistance (direct or indirect) in the acquisition of its own shares (whether pre- or post-acquisition). A special resolution (75%) may, inter alia, be required from shareholders to approve such financial assistance. 7.7 Irrevocable Commitments It is common for a bidder to seek irrevocable under - takings from key shareholders to accept its proposed offer (or to vote favourably) and thereby increase the likelihood of the offer (or scheme) being successful. Similarly, where shareholders’ approval for the sale is required, the private equity buyer may seek irrevoca - ble undertakings from certain existing shareholders to vote favourably. The undertakings can either be “soft” (which allows an out to the undertaking shareholder if a better offer is
accept a superior competing offer. 7.6 Acquiring Less Than 100%
Under Section 215 (1) of the Companies Act, an acquirer can exercise the right of compulsory acqui - sition to buy out the remaining shareholders of a listed company if it receives acceptances pursuant to the general offer in respect of not less than 90% of the listed company’s shares. On 1 July 2023, the criteria for calculating the 90% threshold requirement were revised to expand the scope of shareholders whose shares will be exclud - ed from the calculation. The scope of exclusion now covers any shares held as treasury shares and those shares already held at the date of the offer by the fol - lowing: (a) the offeror (or the offeror’s related corporations); (b) a nominee of the offeror (or its related corpora - tions); (c) a person who is accustomed or is under an obligation whether formal or informal to act in accordance with the directions, instructions or wishes of the offeror in respect of the target company; (d) the offeror’s spouse, parent, brother, sister, son, adopted son, stepson, daughter, adopted daugh - ter or stepdaughter; (e) a person whose directions, instructions or wishes the offeror is accustomed or is under an obliga - tion whether formal or informal to act in accord - ance with, in respect of the target company; or (f) a body corporate that is “controlled” by the offeror or a person mentioned in points (c), (d) or (e) above (“Excluded Persons”). A body corporate is “controlled” by the offeror or Excluded Persons if: • the offeror or Excluded Persons is/are entitled to exercise or control the exercise of not less than 50% of the voting power in the body corporate or such percentage of the voting power in the body corporate as may be prescribed, whichever is lower; or
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