Media Releases
Published Date: 24 January 2019

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.