SINGAPORE Law and Practice Contributed by: Terence Quek, Benjamin Cheong, Hoon Chi Tern and Favian Tan, Rajah & Tann Singapore
As mentioned in 5.3 Spin-Off Followed by a Business Combination , a scheme of arrange- ment requires a majority of the shareholders to be present and voting (either in person or by proxy) at a meeting, representing at least 75% in value of the shares voted at the meeting to approve it before an application can be made to the court for sanction. Once an order sanction- ing the scheme has been issued by the court and lodged with the ACRA, it binds all the tar- get company’s shareholders – irrespective of whether they attended the meeting and how they voted. Generally (but with some exceptions), a scheme of arrangement involving a public company is also subject to the Takeover Code. However, the SIC may – subject to conditions – exempt the scheme from specific provisions of the Takeover Code. 6.4 Consideration and Minimum Price Acquisitions involving public companies typical- ly involve cash offers, which may not necessarily be unique to the technology industry. Depend- ing on the form of the acquisition structure (as further elaborated on elsewhere in this chapter), different types of consideration may be permit- ted. Mandatory General Offer A mandatory general offer must be made in cash – or be accompanied by a cash alternative – in an amount no less than the highest price paid by the offeror (or any person acting in concert with the offeror) for voting rights in the target company both: • during the offer period; and • within the six months prior to its commence- ment.
Voluntary Offer In respect of a voluntary offer, the consideration can be in the form of cash or securities (or a combination thereof) in an amount no less than the highest price paid by the offeror – or any person acting in concert with the offeror – for voting rights in the target company both: • during the offer period; and • within the three months prior to its com- mencement. Rules Under the Takeover Code Notwithstanding the foregoing, the Takeover Code contains a rule that requires offers to be in cash or accompanied by a cash alternative if: • the offeror and its concert parties have bought for cash – during the offer period and within the six months prior to its commence- ment – shares of any class under offer in the target company carrying 10% or more of the voting rights of that class; or • the SIC is of the view that a cash offer is necessary. In such cases, the offer price must be no less than the highest price paid by the offeror and its concert parties for shares in the target company during the offer period and within six months prior to its commencement. 6.5 Common Conditions for a Takeover Offer/Tender Offer Conditions may be imposed regarding antitrust considerations in order to make the offer subject to approval by the Competition and Consumer Commission of Singapore (CCCS) and, where applicable, foreign regulators. Other conditions may be included, subject to the consent of the SIC, but such conditions generally should be objective and reasonable.
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