Code on Take Overs and Mergers revised to clarify application for dual class share companies
Singapore, 24 January 2019… The Monetary Authority of Singapore (MAS) today issued a revised Singapore Code on Take-overs and Mergers (the Code) to clarify its application to companies with a dual class share structure (DCS companies) with a primary listing on the Singapore Exchange.
2 The revisions were made on the advice of the Securities Industry Council (the Council), and incorporates feedback received from the public consultation (484.6 KB)in July 2018. The Council’s response to the public consultation is available on the Council’s website (652.8 KB).
3 The key changes to the Code are: -
(a) Relief for shareholders who trigger a mandatory general offer.
A shareholder may be obliged to make a mandatory offer under the Code, if his voting rights in a DCS company increases beyond the mandatory offer thresholds in the Code, due to:
(i) a conversion of Multiple Voting shares (MV shares) to Ordinary Voting shares (OV shares); or
(ii) a reduction in the number of voting rights per MV share that lowers the total number of voting rights in the DCS company.
Where the shareholder is independent of the conversion or reduction event, the requirement to make a mandatory offer will be waived. If the shareholder is not independent of the conversion or reduction event, the mandatory offer requirement will still be waived if he reduces his voting rights to below the mandatory offer thresholds, or obtains the approval of independent shareholders to waive their right to a mandatory offer within a specified time.
(b) Greater certainty for the market and safeguards for minority shareholders.
Where an offeror makes an offer for a DCS company, the offer price for MV shares and OV shares should be the same. This approach provides greater certainty to market participants and potential offerors. In addition, it acts as a safeguard for OV shareholders by ensuring that any premium paid to MV shareholders is also paid to OV shareholders.
4 The revisions take effect on 25 January 2019. Parties who require further clarification on the effect of the rule changes can consult the Council for further guidance.
*****
Additional information
The Securities Industry Council administers and enforces the Code. It reviews the take-over rules and practices periodically, and recommends changes for promulgation by MAS. It also has powers under the law to investigate any dealing in securities that is connected with a take-over or merger transaction. In addition, the Council issues guidance notes on the application of specific principles or rules.
The Code seeks to ensure that take-overs and mergers are conducted in accordance with good business practice for the fair and equal treatment of all shareholders. The amendments to the Code are made pursuant to section 139(6) of the Securities and Futures Act.
Related News
-
Media ReleasesPublished Date: 31 July 2023
MAS to Strengthen Defence Against Money Laundering Risks in Single Family Offices
MAS launched a public consultation on a revised framework to strengthen surveillance and defence against money laundering risks in Singapore’s Single Family Office sector.
-
Media ReleasesPublished Date: 22 May 2023
7th MAS-CSRC Roundtable Deepens Cooperation in Capital Markets Supervision and Connectivity
MAS and the China Securities Regulatory Commission held their annual supervisory roundtable, where both regulators exchanged views on supervisory approaches and discussed initiatives to deepen capital markets connectivity between Singapore and China.
-
Media ReleasesPublished Date: 11 January 2023
MAS revises the Code of Corporate Governance to reflect independent director tenure limit and mandatory renumeration disclosure for directors and CEOs
The Monetary Authority of Singapore (MAS) introduced amendments to the Code of Corporate Governance, to reflect SGX RegCo’s Listing Rule changes to introduce a nine-year tenure limit for independent directors and mandatory remuneration disclosure for each individual director and CEO.