students manuals iqs law c15
TRANSCRIPT
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Takeovers
ICSA IQS Corporate Law 390
CHAPTER 15
TAKEOVERS
Chapter Objectives
After the completion of this chapter you should be able to understand amongst
other things:
what is a take over?
objectives of the takeover
application of the takeover code
exemptions from the takeover code
procedure for takeover
what is compulsory takeover and partial takeover
what is the prohibited conduct under the takeover code
What is a Takeover?
1.1 A takeover involves a change of control of a company. This occurs when existing
shareholders of a large company transfer sufficient shares to an offeror so as to
confer on the offeror control of the voting power attaching to the target company's
share capital.
1.2 This will be the case where an offeror acquires all or over 50 per cent of the
voting shares in the target company.
1.3 Effective control may also be achieved with a lesser shareholding depending on
the nature of the shareholding structure.
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1.4 In the case of large companies with thousands of shareholders, many may not
actually vote at general meetings so that even a shareholding well below 50 per
cent may allow de facto control.
1.5 Takeovers of target companies are usually conducted in one of the following
modes:
through private treaty or on market share purchases or by a combination of
the two; and
by a general offer to all of the shareholders of the target company.
1.6 The consideration for an acquisition of shares sufficient to gain control of the
target company is usually cash, but the consideration may comprise shares or
debentures in the offeror company or a mixture of cash, shares and debentures.
Sources of Law
1.7 TheMalaysian Code on Takeovers and Mergers 1998, enacted under s.33 of the
Securities Commission Act 1993 (hereinafter referred to as the SCA) is the
principal regulatory framework which lays down the commercial rules and
morality in this sphere.
1.8 The Malaysian Code, hereafter "the Takeovers Code", is not legally enforceable
but emphasises the spirit of its rules. This raises several contentious issues of
policy and the regulations must be seen in the context of the economic and social
functions performed by takeovers.
1.9 Takeovers are also regulated by Part IV Division 2 of the SCA, the Takeover
Code, Practice Notes, the Guidelines on the Regulation of Acquisition of Assets,
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Mergers and Takeovers, or better known as the Foreign Investment Committee
Guidelines, hereafter "the FIC Guidelines", and the Listing Requirements of the
Kuala Lumpur Stock Exchange, hereafter "the KLSE", where the proposal calls
for the takeover of a company which is listed on the KLSE.
Role of the Securities Commission
1.10 The Malaysian Panel on Takeovers and Mergers administered the Takeovers
Code until he establishment of the Securities Commission, hereafter "the
Commission", in March 1993 under the SCA. In the discharge of its duties, the
Commission is guided by the Practice Notes issued by the Panel on Takeovers
and Mergers, hereafter "Practice Notes", which sets out how it will exercise its
discretion and interpretation of the TakeoversCode, up to the date of the
dissolution of the latter
OBJECTIVES OF THE TAKEOVERS CODE
2.1 The Takeovers Code does not aim to prevent takeovers from taking place. The
decision on whether or not a bid is accepted is left to the determination of the
shareholders of the target company. The purpose of these regulations is to ensure
that takeover bids are conducted fairly.
APPLICATION OF THE TAKEOVERS CODE
3.1 Section 15(1)(d) of the SCA empowers the Commission "to regulate the takeovers
and mergers of companies" and s 33(1) defines a takeover as an acquisition of
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shares in a company which, when aggregated with shares already held by the
acquirer, would give the acquirer the right to exercise or control the exercise of
more than 33 per cent of the voting right of that company.
3.2 The acquirer is defined as the person making the takeover offer whether by
himself or herself or through his or her agents, or in concert with others.
3.3 Section 33(1) only applies to the takeover of public companies, whether or not
these are listed, although the Commission may, at its discretion, include such
private companies as it may determine.
3.4 Notwithstanding the above, Practice Note No 1.2 specifies that the Takeovers
Code will be applicable where the target is a private company having
shareholders funds or paid up capital in excess of RM10 million, and the
purchase consideration is more than RM20 million.
3.5 The Takeovers Code aims to regulate acquisitions of shares in a target company,
which effect a change in its control.
3.6 It does this through Code 6 which calls for the making of a mandatory general
offer to all shareholders of the company where:
an acquirer who has obtained control in a company;
an acquirer acquires more than two per cent of the voting shares in a target
company within a six month period when such a person already holds
more than 33 per cent but less than 50 per cent of the voting rights in that
target company. This is often referred to as the "creeping takeover"
provision.
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3.7 Section 33(1) of the SCA defines an acquirer as either a person or two or more
persons acting in concert with another, who acquire or propose to acquire control
in a company whether the acquisition is affected by the person(s) or an agent or
two.
3.8 The term "acting in concert" is defined widely in s.33(2) SCA to comprise
"persons who, pursuant to an agreement, arrangement or understanding cooperate,
through the acquisition by any of them of voting shares in a company or to act for
the purposes to obtain or exercise control over that company".
3.9 This definition raises a rebuttable presumption that persons acting in concert may
be categorised as:
a company, its parent, subsidiaries and associate companies;
a related company through common directorships or close relatives and
related trusts;
a company with any of its pension funds;
a person with any investment company, unit trust or other fund whose
investments such person manages on a discretionary basis; and
a financial adviser, who manages funds on a discretionary basis, with its
clients where the aggregate shareholding exceeds 10 per cent the capital of
the latter.
3.10 The threshold is set at 33 per cent on the assumption that persons who hold less
than this percentage cannot control the affairs of a target company.
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3.11 To lower the threshold would extend the operation of the Takeovers Code to
situations where a takeover may only be a remote possibility and regulation would
be inappropriate. InNCSC v Consolidated Gold Mining Areas NL
EXEMPTIONS FROM THE TAKEOVERS CODE
4.1 The Commission is empowered pursuant to s 33C of SCA to grant certain
exemptions and waivers, upon the application of the relevant parties, from the
obligatory requirement to make a mandatory offer pursuant to section 6 of the
Code.
4.2 These circumstances have been clarified through Practice Notes released by the
Securities Commission pursuant to s 33A(4) and are generally technical
exemptions and waivers, which are based on the assumption that it would not
assist the objectives of the Takeovers Codeby requiring compliance.
Practice Note No 2.9.1 provides for exemptions if transactions involve new securities
4.3 Exemptions if transactions involve new securities:
the issue of new voting shares as consideration for the sale of assets and/or
interests would result in the vendor or vendors incurring an obligation to
make a mandatory offer for the acquiring company;
a person incurs an obligation to make a mandatory offer as a result of cash
subscription for new voting shares in a company; or
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an underwriter for the issue of new voting shares by a company incurs a
mandatory offer obligation as a result of his underwriting obligation; or
a person incurs an obligation to make a mandatory offer as a result of
acquiring newly issued voting shares for the purpose of restoring his/her
voting shares to its previous level and the acquisition of the newly
acquired voting shares was from persons who were allotted the voting
shares as consideration for the sale of assets by that person.
4.4 Such exemption represent an exercise of discretion on the part of the Commission
and will generally not be granted unless the applicant meets the conditions
precedent as set out Practise Note 2.9.1(5) which essentially require:
that there has been no disqualifying transaction by the person or group of
persons acting in concer; and
that approval be obtained from the independent shareholders of the target
company by way of a poll at a duly convened general meeting. To ensure
that the interests of these independent shareholders are protected, and that
their votes are cast on an informed basis, the board of the target companyis required to appoint an independent adviser to prepare and circularise
competent advice to these shareholders in the form as required pursuant to
the Practise Note. Both the adviser and the circular must be approved by
the Commission.
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Practice Note 2.9.2 provides for an exemption if convertible securities are exercised
Exemption if convertible securities are exercised:
by a person who hold a convertible securities in an offeree, and who has
not exercised his right of conversion in relation to the convertible
securities, whether in part or otherwise, when he intends to exercise such
conversion rights in order to maintain his previous level of voting shares
of the offeree which has been diluted as a result of the exercise of
conversion by other holders of convertible securities.
Such convertible securities held by the person were previously obtained
through a rights issue entitlement;
The person has not acquired such convertible securities other than by way
of his rights issue entitlement;
The person and his advisers give a written confirmation to the
Commission that the first two requirements have been complied with and
the purpose of exercising such conversion is so as to maintain the previouslevel of voting shares of the offeree.
Practice Note 2.9.3 provides for an exemption if it is a rescue operation
4.5 A person may apply for an exemption where the objective of the acquisition is to
rescue the company whose shares are being acquired.
4.6 While the Commission is not bound by any specific criteria and will look at the
merits of each individual application in making its determination, the general
guidelines would include companies:
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the net tangible assets per voting share of the offeree is less than 50% of
its par value;
the offeree has a gearing ratio which exceeds 3:1;
where any rights issue would usually have been under-subscribed; and
where the rescue operation is being conducted for the benefit of the
offeree.
4.7 To ensure that the case is bona fide, the Commission may require the applicant to
establish the above guidelines and the seriousness of the financial position of the
company by appointing a competent individual person to compile a report, which
is to be attached to the application. The contents of the report are set out in
Practise Note 2.9.3(6).
Practice Note 2.9.4 provides for an exemption arising from foreclosure of voting
shares
4.8 This exemption deals with instances where a lender to the company has
foreclosed on a loan, which is secured, whether in part or otherwise, by shares
with voting rights in the company. In such circumstances the Commission would
normally grant a waiver should all of the following criteria be met:
that the voting shares were not pledged under situations where the lender
had reason to believe that foreclosure would be likely;
that the lender is able to justify to the Commission that the foreclosure is
necessary; and
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that the lender undertakes to place voting shares in excess of 33 per cent of
the voting shares of the company within a period of six months.
Practice Note 2.9.5 provides for an exemption from a general offer involving
placement of securities having voting shares
4.9 This exemption envisages the situation, which arises from the placement of
securities having voting rights.
4.10 This may be the result of a corporate restructuring exercise or where the
consideration for an acquisition involves the issue of new securities.
4.11 The criteria for a exemption under such circumstances are that the applicant meet
all of the following:
that the acquisition in excess of 33 per cent is through the issue of new
securities;
that a firm arrangement, or a firm undertaking in exceptional
circumstances, has been effected for the placement of such voting rights in
excess of 33 per cent to other non-related parties; and
that the deemed offeror declares that he or she is not acting in concert with
any of the parties to the proposed transaction.
4.12 Underwriters who end up with securities as a result of a less than fully subscribed
public offering are also excluded from the requirement of making a mandatory
offer where:
their main business is that of underwriting; and
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they undertake to place the securities within a period of six months.
4.13 However, the subsequent acquisition of the securities from the underwriter will be
subject to s 6 of the Takeover Code.
Practice Note 2.9.6 provides for an exemption if the remaining holders of voting
shares of a company have given written undertakings not to accept an offer
4.14 A person may apply for an exemption on the grounds that there are written
undertakings by the remaining shareholders of the target company not to accept
the offer.
4.15 This would negate the need for the making of a mandatory offer pursuant to s 6 of
the Takeover Code but the Commission is only inclined to consider such an
application where:
The company is an unlisted company; and
Where the person holds more than 50% of the voting shares of the
company, all the remaining holders of voting shares have provided an
undertaking in writing that they do not wish to accept a take-over offer;
and
Where the person holds less than 50% of the voting shares of the
company, the remaining holders of more than 50% of the voting shares of
the company, have provided an undertaking in writing that they do not
wish to accept a take-over offer; and
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Practise Note 2.9.7 provides for an exemption in transactions involving acquisition
of additional voting shares by members of a group acting in concert
4.16 This examines transactions where s 6 of the Takeover Code is triggered as a result
of the acquisition of additional voting rights by members of a group acting in
concert.
4.17 Waivers are unlikely to be granted by the Commission if one or more of the
members within that group acting in concert increase their voting rights to more
than 50 per cent in the target company.
4.18 In any other circumstance a waiver may be granted after due consideration of::
whether the leader of the group or the largest individual shareholding had
changed and whether the balance between the shareholdings in the group
had changed significantly;
the price paid for the voting rights acquired amounted to a significant
premium or not; and
the relationship between the persons acting in concert and the duration or
period for which they had been so acting.
Practise Note 2.9.8 provides for an exemption in compulsory acquisition
4.19 A person may apply for an exemption from an obligation where the person
intends to proceed with compulsory acquisition pursuant to s 180 of the
Companies Act.
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4.20 The Commission will only consider such an application where there is a written
undertaking given to them that the person would implement a compulsory
acquisition under s 180 of the Companies Act.
Practise Note 2.9.9 provides for an exemption based on national policy
4.21 A person may apply for an exemption where the acquisition has been approved by
the Foreign Investment Committee (FIC) based on national policy.
4.22 The Commission may grant an exemption for such an application where:
approval has been obtained by the FIC
prior consultation has been held on the matter with the Commission.
Practise Note 2.9.10 provides for an exemption for holders of voting shares,
directors and persons acting in concert when company purchases its own voting
shares
4.23 A holder of voting shares who, as a result of a reduction of the voting shares of
the company through a buy-back scheme under the Companies Act, has increased
his holding of voting shares to more than 33% or, if his existing holding of voting
shares is more than 33% but less than 50%, by more than 2% in any 6 month
period, will be exempted if the increase in is inadvertent.
4.24 The Commission may grant an exemption if the following procedures have been
observed;
the holders of the relevant class of voting shares of the offeree must have
been provided with competent independent advice regarding the proposal;
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the independent advisers circular to holders of the relevant class of voting
shares setting out details of the proposal must be consented by the
Commission;
interested parties must have abstained from voting at that meeting;
prior consultation should have been held on the matter with the
Commission.
PROCEDURE FOR TAKEOVER
Practise Note 4.6 provides exemption from the full provisions of the Takeover Code
5.1 This Practice Note sets out the mechanism that allows the offeror to seek an
exemption from having to comply with the full provisions as set out in the
Takeover Code. The Commission will consider the application where:
the offer is not regarded as hostile;
the application is submitted to the Commission before incurring a general
offer obligation;
the remaining shareholders are less than 30 in number and carry less than
33% per cent of the voting shares in the offeree company; and
the value of the remaining voting rights based on the offer price is less
than RM10 million.
5.2 If the Commission agrees to the exemption from the formal offer procedure, the
offeror need only undertake the takeover offer through the issue of offer letters
that must first be vetted and approved by the Commission.
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5.6 In order to prevent discrimination between shareholders, takeover offers must be
made to each member holding the class of shares sought whether the bidder
proposes to acquire all or only a proportion of the shares in the target company.
All offers must contain the same terms and conditions and each shareholder must
receive a copy of the offer. These principles of equality in the treatment of, and
the provision of information to, all shareholders reflect s 13 and 14 of the
Takeovers Code.
5.7 Section13(1) of the Takeover Code states that the offeror shall submit the offer
document and other information in relation to the take-over offer in such form and
manner as the Commission may require for its consent within four days from the
date of sending of the written notice.
5.8 Also, the offeror shall disclose in the offer document all such information as the
offeree shareholders and their professional advisers would reasonably require, and
would reasonably expect to find, in an offer document or for the purpose of
making an informed assessment as to the merits of accepting or rejecting the take-
over offer and the extent of the risks involved in doing so: s 13(2) of the Takeover
Code
COMPULSORY TAKEOVERS
6.1 A bidder who becomes entitled to 90 per cent of the shares in a target company
may compulsorily acquire the remainder of the shares pursuant to the procedure
set out in s 34 SCA. In particular, the offeror must have become entitled to at
least 90 per cent of the shares in the company or in the particular class which is
the subject of the takeover offer. The offeror must then within two months give
prescribed notice of its wish to acquire the outstanding shares held by the
dissenting minority shareholder: s 34(1) SCA.
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6.2 Where the offeror has given notice to any dissenting shareholder that it desires to
acquire his/her shares, the dissenting shareholder may within one month from the
date the notice was given, require the offeror to supply him with the names and
addresses of all the dissenting shareholders.
6.3 The offeror shall not be entitled to acquire the shares of the dissenting
shareholders until fourteen days after the posting of the statement of those names
and addresses to the dissenting shareholder.
DUTIES OF THE BOARD OF THE OFFEREE COMPANY
General
7.1 Sections 34 37 of the Takeover Code are of particular significance in the
determination of the standards expected of the directors of the offeree company in
the course of a takeover. The s 35 states that no action which may lead to thefrustration of an offer may be taken by the board where a bona fide offer has been
communicated to the company or where it has reason to believe that a bona fide
offer is imminent.
7.2 Section 34 of the Takeover Code states that the Board of Directors of the offeree
shall give any information provided to the offeror to any other bona fide potential
offeror upon request.
7.3 Section 35(1) of the Takeover Code also states that if the board of directors of the
offeree has reason to believe that a bona fide takeover offer might be imminent,
they shall not without the consent of the shareholders at the general meeting :
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issue any authorised but unissued shares of the offeree;
issue or grant options in respect any unissued shares of the offeree;
create or issue or permit the creation or subscription of any shares of the
offeree;
sell, dispose of or acquire or agree to sell, dispose of or acquire assets of
the offeree of a material amount; or
enter into or allow contracts for or on behalf of the offeree to be entered
into otherwise than in the ordinary course of business of the offeree.
7.4 However, s 35(2) of the Takeover Code provides an exemption where the same
was done pursuant to a bona fide contract entered into prior to an obligation under
subsection (1) arising and was not to frustrate a takeover offer or pursuant to some
other obligation or special circumstances which the Commission may approve in
writing.
7.5 The directors of the offeree company are, at minimum, required to be honest and
not to mislead their shareholders in the course of a takeover.
7.6 Expenses may be incurred in the course of a takeover and where the offer is not
friendly or solicited, such expenditure may be fairly considerable as the directors
implement measures to ward off the takeover bid. Such expenses are regarded as
bona fide corporate expenses if the directors are of the opinion that these were
necessarily incurred in the interests of the company: Peel v London and North
Western Railway Co [1907] 1 Ch 5.
Appointment of independent advisers
7.7 The board of the offeree company must obtain competent independent advice on
any offer and the substance of such objective advice must be made available to its
shareholders: s 15 of the Takeover Code. Persons who are qualified to provide
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such competent advice are either merchant bankers or approved company
auditors.
7.8 However, persons who are faced with actual or potential conflicts of interest are
deemed inappropriate to tender such advice as they are not regarded as being
independent.
Section 15(8) of the Takeover Code and Practice Note No 4.3 clarifies the
position with respect to such advisers and specifically requires the offeree
company to have the appointment of their independent advisers confirmed
by the Commission prior to their assuming office.
Preparation of documents
7.9 Section 12(1)of the Takeover Code states that a person who intends or proposes to
make a take-over offer for the voting shares of a company shall immediately
announce the fact of the proposed offer by a press notice.
7.10 In the case of a voluntary offer, the person referred to in section12 (1) of the
Takeover Code and an acquirer who has obtained control in a company, or an
acquirer who holds more than 33% but less than 50% of the voting rights of a
company who has acquired in any period of six months more than 2% of the
voting shares of the company shall send a written notice to-
the board of directors of the company or an adviser designated by the
board of directors of the company;
the relevant stock exchange, if the securities of the company or the voting
shares are listed on the relevant stock exchange; and
the Commission.
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7.11 Section 38 of the Takeover Code states that no person shall:
provide false or misleading information;or
provide or cause to be provided any document which contains a material
omission; or
engage in misleading or deceptive conduct,
to the holders of voting shares or their professional advisers.
7.12 It is a defence if the person had:
reasonable grounds to believe and did believe that the information was
true and not misleading or the omission was not material or contains no
material omission or the conduct in question was not misleading or
deceptive; or
when the person became aware of the false or misleading statement or the
material omission or contains a material omission or the conduct in
question was deceptive immediately disclosed the fact to the Commission,
stock exchange if listed and make an announcement by way of a press
notice containing such matters as are necessary to correct the false or
misleading matter, the omission or conduct as the case may be.
7.13 The key requirement is that the information, whether in the form of facts stated or
opinions expressed, be fair and accurate and include all material facts to enable
the shareholders to make an informed decision as to whether or not to accept the
offer.
7.14 The directors are under a duty to take reasonable care to ensure that this is
achieved whether the same is completed by himself or herself, or by his or her
authorised representatives.
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PARTIAL TAKEOVERS
8.1 Offerors may not always want to acquire all the shares of the target company but
may seek to acquire only a sufficient proportion of the offeree company's shares
to enable them to gain control.
8.2 For example, an offeror may seek to acquire only 51 per cent or perhaps a lesser
percentage of shares. This type of bid is called a partial takeover. From the
offeror's point of view a partial takeover presents an important advantage in that
the offeror gains control of the target company while having to outlay an amount
considerably less than would be the case with a full takeover.
8.3 A partial takeover can only occur with the express consent of the Commission: s
11(1) of the Takeover Code.
8.4 Section 11(2) of the Takeover Code allows the offeror to bid for a percentage of
the offeree company's shares with the consent of the Commission.
8.5 Each shareholder must be allowed to accept in full for the relevant proportion ofhis or her shareholding and where the number of shares tendered exceeds this
proportion, they must be scaled down rateably.
8.6 The Commission has imposed stringent conditions for partial offers, probably as
an indication of its aversion to the same, and explains why such offers are
uncommon. The conditions differ and depend on the possible result of the partial
offers:
8.7 An offeror in a partial offer who has obtained the level of acceptances specified in
the take-over offer or any person acting in concert with such offeror shall not
acquire any voting shares that had been the subject of the take-over offer during
the period of twelve months beginning from the end of the offer period unless
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otherwise approved by the Commission in writing: section 11(6) of the Takeover
Code.
8.8 However, where the result would be the offeror holding more than 33 per cent but
less than 100 per cent of any class of voting shares of the offeree, the offeror shall
in addition to the requirements of section11 (7) Takeover Code, ensure that the
offer document contains a condition that the offeror shall not make a declaration
that the take-over offer is successful unless the offeror has received a vote of
approval of the take-over offer by offeree shareholders holding more than 50% of
such class of voting shares of the offeree: s 11(8) Takeover Code.
8.9 However, the Commission may exempt any person from the requirement under s
11(8) Takeover Code if one offeree shareholder holding more than 50% of such
class of voting shares has accepted the take-over offer: s 11(9) Takeover Code.
PROHIBITED CONDUCT UNDER THE TAKEOVERS CODE
9.1 Section 35 of the Takeover Code sets out certain actions which the board of the
offeree company may not undertake of its own volition without the prior approval
of the shareholders at a general meeting when it is in receipt of a takeover offer,
or where it has reason to believe that such an offer is imminent or during the
course of the offer. These prohibitions are aimed at preventing the board from
unilaterally frustrating the offer and include:
the issue of any authorised but unissued shares;
the issue or grants of options in respect of unissued shares;
the creation or issue or the permission for the creation or issue of any
securities carrying the right of conversion into or subscription for shares of
the company;
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the entry into contracts other than in the ordinary course of business; and
the sale, disposal or acquisition, or an agreement thereto, of assets of
material amount.
9.2 In examining various defensive schemes, the NCSC Report distinguished between
defensive tactics and defensive strategies. Tactics are measures adopted to
combat a hostile bid which has been made or is thought imminent. Strategies are
intended to discourage bids being made at all. While takeovers are not as
common in Malaysia, the following are some of the more common defensive
tactics:
Branding the bid inadequate
Criticising the offeror
9.3 Offeree company directors should ensure that their criticism does not involve a
misleading statement. This is reflected in part by s 38 of the Takeover Code.
Releasing favourable information
9.4 This may breach s 16 of the Takeover Code where it constitutes a profit forecast
or revaluation of assets without undertaking the proper procedures. The release of
such information may have adverse results later for offeree company directors
where shareholders' expectations are raised and these ultimately prove to be
unfounded. This may increase the likelihood of a successful, later bid.
Bonus issues and higher dividends
9.5 The threat of takeover has often caused companies to declare higher dividends as
a means of increasing shareholder loyalty. While this may not be for the long-
term benefit of the company, it is a management decision that shareholders may
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take into account in their judgment of the directors. It is generally inappropriate
for the courts or the Commission to interfere with such decisions.
"Friendly" takeover
9.6 The offeree company directors may actively foster an auction in the face of a
hostile bid or the first bid may attract a rival bidder, which the directors regard as
more attractive. This may be of benefit to shareholders, especially where they
receive a higher price from a "white knight".
FOREIGN INVESTMENT COMMITTEE GUIDELINES
10.1 The importance of the Foreign Investment Committee, hereafter "the FIC" is
highlighted in Part III, Rule 9.1(a) of the Takeovers Code which states:
" Where an offer comes within the 'Guidelines for the Regulation ofAcquisition of Assets, Mergers and Takeovers' it should be a condition of the
offer that it should lapse in the event of the FIC not giving its approval."
10.2 While the government actively pursues and recognises the role of private foreign
investment in the development of Malaysia, it is nonetheless conscious of the
need to preserve national interests. To this end, the government formulated and
released the guidelines referred to in Rule 9.1(a) above, better known as "the FIC
Guidelines", in 1974
10.3 The principal concern of the government at that time was that unregulated
takeovers would result in greater concentration of wealth in the hands of a
minority and the increased imbalance in ownership and control.