SINGAPORE Law and Practice Contributed by: Terence Quek, Benjamin Cheong, Hoon Chi Tern and Favian Tan, Rajah & Tann Singapore
Mandatory Offer Except with the consent of the SIC, a mandatory offer must be conditional upon the buyer receiv- ing acceptances that would result in the buyer (and parties acting in concert with the buyer) holding more than 50% of the voting rights in the target company. Voluntary Offer A voluntary offer must be conditional upon the buyer receiving acceptances that would result in the buyer (and parties acting in concert with the buyer) holding more than 50% of the voting rights in the target company. The buyer must obtain approval from the SIC in order to: • impose a condition requiring a higher level of voting rights in the target; or • impose other conditions. These conditions cannot depend on the subjec- tive interpretation or judgment – nor lie, in the hands – of the buyer. A pre-conditional voluntary offer may be used if a firm intention to make an offer has been announced, subject to the fulfilment of certain pre-conditions. As with the mandatory offer, such conditions must be objective and reason- able. Partial Offer All partial offers require the prior consent of the SIC. Consent will normally be given for a partial offer that will not result in the offeror (and parties acting in concert with the offeror) holding 30% or more of the voting rights in the target company. Consent will not be given for offers for between 30% and 50%. Consent will not be given for offers for more than 50% of the voting rights
unless a number of conditions are met, includ- ing the offer being made conditional upon the approval of the target company’s shareholders. 6.6 Deal Documentation In typical public takeover scenarios, where a buyer wishes to acquire a target company by way of a general offer (whether mandatory, vol- untary or otherwise), there is no requirement for the buyer to enter into a transaction agreement with the target company. In the context of a scheme of arrangement, an implementation agreement is typically entered into between the buyer and the target company in order to set out: • the terms and conditions under which the transaction will be implemented; • the conditions precedent to the implementa- tion of the scheme; • representations and warranties, and under- takings; and • certain prescribed occurrences that would permit either the buyer or the target company to terminate the implementation agreement (subject to the consent of the SIC). 6.7 Minimum Acceptance Conditions As described in 6.5 Common Conditions for a Takeover Offer/Tender Offer , mandatory general offers are conditional upon the buyer receiving acceptances that would result in the buyer (and the parties acting in concert with the buyer) hold- ing more than 50% of the voting rights in the target company. For voluntary offers, the offer may be condition- al upon receipt of a higher level of acceptance (with the consent of the SIC). A higher threshold of 90% is typically set when the buyer is seek- ing to privatise the target through the use of the
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