SINGAPORE Law and Practice Contributed by: Terence Quek, Benjamin Cheong, Hoon Chi Tern and Favian Tan, Rajah & Tann Singapore
• there is undue movement in its share price or a significant increase in the volume of share turnover. Should the buyer announce its plans or inten- tions with regard to the target company without a firm intention to make an offer for the target company, the Securities Industry Council (SIC) may require that the buyer clarify its intentions within a specific period of time. On 7 October 2022, the SIC issued the Practice Statement on the Waiver of the Application of the Singapore Code on Take-overs and Merg- ers to Unlisted Public Companies (the “Practice Statement”), which sets out the procedure for an unlisted public company incorporated in Singa- pore with more than 50 shareholders and NTAs of SGD5 million or more to obtain a waiver in respect of the Takeover Code (the “Code Waiv- er”). Unlisted public companies that do not have more than 50 shareholders and NTA of SGD5 million may also apply for a Code Waiver in advance if they are soon to fall within the ambit of the Takeover Code. The Practice Statement has helped ease the regulatory and compliance requirements of the Takeover Code for start-ups with a size- able investor base (eg, due to previous rounds of successful series fundings) looking to raise additional equity financing, including from the venture capital and private equity space. 6.2 Mandatory Offer Under the Takeover Code, unless a waiver is obtained from the SIC, a mandatory offer must be made to all shareholders of a target company in either of the following situations: • when a buyer acquires shares (aggregated with the shares held or acquired by persons
acting in concert with the buyer) that carry 30% or more of the voting rights of the com- pany; or • when a buyer (together with persons acting in concert with the buyer) holds between 30% and less than 50% of the voting rights in a company and, within any six-month period, the buyer (or any person acting in concert with the buyer) acquires additional shares carrying more than 1% of the voting rights. 6.3 Transaction Structures The following transaction structures are typically used for the acquisition of a public company in Singapore. General Offers Essentially, takeovers can be either mandatory (ie, when the buyer is obliged to do so under the Takeover Code) or voluntary (ie, when they occur in the absence of such obligation). An offer can or – in the case of a mandatory offer – must be for either: • all the outstanding voting capital of the target company; or • only part of the target company’s outstand- ing voting capital (by way of a partial takeover offer). Different rules apply to the different types of offers, as detailed elsewhere in this chapter. Schemes of Arrangement A scheme of arrangement is a court process that allows a company to agree on matters with shareholders, including an agreement to transfer shares to a bidder in exchange for cash or other forms of consideration. The process is target company-driven – that is, the target company makes the application to the court – and is thus dependent on a co-operative target company.
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