SFC issued a bulletin regarding issues relating to the Codes on Takeovers, Mergers and Share Buybacks (the
Takeovers Code), which includes the following highlights:
Identifying All Relevant Regulatory Approvals for Completion of Offers
SFC reminded offerors, offeree companies and their respective advisers that sufficient and thorough due diligence should be conducted at the outset of a transaction so that all regulatory approvals required for the completion of offers are identified early and disclosed appropriately in line with Rule 3.5(e) of the Takeovers Code. Failure to do so can cause numerous problems, for example, unnecessary delays in the offer timetable or locking up shareholder shares pending regulatory approvals (where discovered and disclosed after the shareholders have accepted an offer). Furthermore, if a particular regulatory approval is not specifically disclosed in the firm intention announcement, SFC may not allow such condition to be invoked under Note 2 to Rule 30.1 of the Takeovers Code to cause an offer to lapse. An offeror might risk having to proceed with an offer in breach of other legal or regulatory requirements. Also, SFC may or may not consent to an extension of an offer period to accommodate the time required to obtain the omitted regulatory approval, which may also result in a breach of the timetable requirements under the Takeovers Code.