SINGAPORE Law and Practice Contributed by: Terence Quek, Benjamin Cheong, Hoon Chi Tern and Favian Tan, Rajah & Tann Singapore
compulsory acquisition mechanisms described in 6.8 Squeeze-Out Mechanisms . 6.8 Squeeze-Out Mechanisms Under the Companies Act, the power of compul- sory acquisition arises where a scheme or con- tract involving the transfer of all the shares (or all the shares in any particular class) in the tar- get company to the offeror has been approved within four months of the offer by the holders of no less than 90% of the total number of shares involved in the transfer. On 1 July 2023, the criteria for computing the 90% threshold requirement were revised to expand the scope of shareholders whose shares will be excluded from the computation. The scope of exclusion now covers the following. • Any shares held as treasury shares. • Those shares already held at the date of the offer by: (a) the offeror (or the offeror’s related corpo- rations); (b) a nominee of the offeror (or its related corporations); (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, sis- ter, son, adopted son, stepson, daughter, adopted daughter or stepdaughter; (e) a person whose directions, instructions or wishes the offeror is accustomed to, or is under an obligation – whether formal or informal – to act in accordance with, in respect of the target company; or (f) a body corporate that is “controlled” by the offeror or a person mentioned in para- graphs (c), (d) or (e) of this list (“excluded
persons”) – a body corporate is “con- trolled” by the offeror or excluded persons if (i) 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 (ii) the body corporate is – or a majority of its directors are – accustomed to, or is/ are under an obligation – whether formal or informal –to act in accordance with, the directions, instructions or wishes of the offeror or excluded persons. 6.9 Requirement to Have Certain Funds/ Financing to Launch a Takeover Offer Private Takeovers For private takeovers, a financing condition is subject to negotiations between the buyer and the seller; however, it is not typically included in transaction documentation. Public Takeovers For public takeovers, the firm intention to under- take an offer requires an unconditional confir- mation by the buyer’s financial adviser (or by another appropriate third party) that the buyer has sufficient resources available to satisfy full acceptance of the offer. As such, an offer cannot be conditional upon the buyer obtaining financ- ing, and provisions for “certain funds” will be included in financing documents entered into in connection with the offer. 6.10 Types of Deal Protection Measures Deal protection measures in private takeovers are a matter of negotiation between the buyer and the counterparty. Where the Takeover Code applies, the target company’s duty under the Takeover Code is to
305 CHAMBERS.COM
Powered by FlippingBook