INDONESIA Law and Practice Contributed by: Melissa Butarbutar, Ken Prasadtyo, Kevin Yehezkiel and Cindy Caroline, TnP Law Firm
report on the issuance of such derivatives to the OJK. 4.6 Transparency A purchaser intending to acquire a private com - pany must announce its intention through a daily Indonesian newspaper with national circulation. However, there is no requirement, and it is rather uncommon in practice, for a purchaser to dis - close the purpose of acquiring such target com - pany in the newspaper announcement. However, disclosure of the acquisition’s purpose may be required depending on the industry. Some industries may require filing to or approval from the authorities for pursuing an acquisition. For example, the financial sector heavily regu - lates the requirements for acquiring or disposing of shares in companies within this sector, so pro - spective acquirers may be required to disclose the purpose of their acquiring certain financial companies or banks. In other cases, under OJK Regulation No. 9 of 2018 on Takeover of Public Companies ( “OJK Regulation No. 9/2018” ), the new controller of public company must make a mandatory tender offer by submitting a manda - tory tender offer statement, which also requires the new controller to disclose the purposes of the acquisition. 5. Negotiation Phase 5.1 Requirement to Disclose a Deal Disclosure obligations may differ for private and public companies. As described above, the acquisition of a private company requires the purchaser, as the prospective controller, to announce the intended acquisition through a daily Indonesian newspaper with national circu - lation. Under the Company Law, the newspaper
announcement must be made at least 30 days prior to the effective date of the acquisition. On the other hand, in the case of acquisition of a public company, the prospective control - ler must conduct a mandatory tender offer after the acquisition becomes effective. Prior to the effective date of the acquisition, the prospective controller may, but is not obliged to, announce the ongoing negotiation with the seller through a daily Indonesian newspaper with national cir - culation. This approach is commonly taken by prospective controllers of public companies if they expect a rise in the target public compa - nies’ shares, which would affect the minimum mandatory tender offer price. Eventually, if the target company becomes aware of the potential change of control, the target company must sub - mit a disclosure of material information or facts regarding the proposed change of control to the Based on market practice, the timing of disclo - sure is in accordance with the requirements set out under the applicable laws and regulations. 5.3 Scope of Due Diligence There is no specific provision for due diligence under the prevailing laws and regulations in Indonesia. Based on common practice and depending on the nature of the target company’s business, the scope of due diligence typically covers the following aspects: • corporate documents; • licensing requirements and compliance mat - ters; • assets; OJK and announce it to the public. 5.2 Market Practice on Timing
• material agreements; • employment matters; • intellectual property; and
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