MALAYSIAN CODE ON TAKE-OVERS AND MERGERS 1998
MALAYSIAN CODE ON TAKE-OVERS AND MERGERS 1998
PU(B) 550/1998
(1) This code may be cited as the Malaysian code On Take-Overs and Mergers 1998.
(2) This code shall come into operation on 1st January 1999
13. Offer document. (1) 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 made under subsection 12(2) or paragraph 12(3)(a).
(2) 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.
(3) The information required by subsection (2) to be included in an offer document shall be--
(a) information which is within the knowledge of-
(i) an offeror and all persons acting in concert with the offeror;
(ii) if the person referred to in subparagraph (i) is a
14. Offeree board of directors' comments on the take-over offer. (1) The board of directors of the offeree shall circulate its comments on the take-over offer to every offeree shareholders, including any other form of consideration offered by the offeror, within ten days from the date that the offer document was posted in accordance with subsection 13(7).
[ Am. P.U.(B) 139/2004: s. 8 ]
(2) The board of directors of the offeree shall disclose in a circular made under subsection (1) to every offeree shareholder all such comments and information as the offeree shareholders and their professional advisers would reasonably require, and would reasonably expect to find, in such circular 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.
[ Am. P.U.(B) 139/2004: s. 8 ]
(3) The comments and information required under- subsection (2) to be included
in t
15. Independent advice circular. Cases Referred (1) The board of directors of the offeree shall appoint an independent adviser in relation to the take-over offer and the substance of such advice must be made known to the offeree shareholders in an independent advice circular.
[ Am. P.U.(B) 139/2004: s. 9 ]
(2) The board of directors of the offeror shall appoint an independent adviser where the take-over offer being made is a reverse take-over or where the board of directors of the offeror is faced with a conflict of interest situation.
(3) The substance of any advice given to the board of directors of the offeror under subsection (2) shall be made known to the all holders of voting shares of the offeror.
(4) In the case of a reverse take-over, the board of directors of the offeror shall obtain the approval of the holders of voting shares of the offeror for the reverse take-over prior to the posting of the offer document to the offeree shareholders.
In accordance with the provisions of subsection 33A(3) of the Act, it is hereby declared that the acquisition of voting shares shall take place in an efficient, competitive and informed market and shall have cognisance of the objectives as stated in subsection 33A(5) of the Act.
16. Profit forecasts and asset valuation. (1) Where profit forecasts are provided by the offeror or the offeree, they shall ensure that such profit forecasts shall comply with the following:
(a) there shall be at least a profit forecast for the current financial year and in the event that the forecast year is less than three months of the current financial year the period of the forecast will be the current financial year and the next immediate financial year;
(b) the assumptions, including the commercial assumptions, upon which the profit forecasts are based, shall be stated in any document sent to offeree shareholders in connection with take-over offer;
(c) the accounting policies and calculations for the forecasts shall have
been examined and reported on by the auditors, consultant accountants or any
other financial adviser of the offeror or the offeree; and (d) where a profit forecast includes a period in which trading has already
commenced, any previously
17. 50% condition. (1) An offeror shall include in an offer document a condition that the take- over offer shall be subject to the offeror having received acceptances which would result in the offeror and all persons acting in concert with the offeror holding in aggregate more than 50% of the voting shares of the offeree.
[ Am. P.U.(B) 139/2004: s. 10 ]
(2) For the purposes of computing the level of acceptances in subsection (1), such voting shares that are already acquired, held, or entitled to be acquired or held by the offeror and all persons acting in concert with the offeror, shall be included in computing whether the offeror has received the level of acceptances referred to in subsection (1).
(3) Subsection (1) shall not apply to a partial offer.
[ Subs. P.U.(B) 139/2004: s. 10 ]
(4) A take-over offer shall lapse if the condition referred to in subsection
(1) is not fulfilled by 5.00 p.m. on the sixtieth day from the date on which
the offer-
18. Voluntary take-over offers shall not be subject to certain conditions. (1) An offeror shall not include in an offer document in respect of a voluntary offer, a defeating condition, however expressed, the fulfilment of which depends on-
(a) an opinion, belief or other state of mind of the offeror or any person acting in concert with the offeror; or
(b) whether or not a particular evens happens, being an event that is within the sole control of or is a direct result of an action by the offeror or any person acting in concert with the offeror.
(2) A condition in an offer document that is made in contravention of subsection (1) shall be void.
(3) Notwithstanding subsection (1) or (2), the offeror shall not be released from the offeror's other obligations under this code
19. Fulfilment of conditions. (1) In the case of a voluntary offer, all conditions attached to the take-over offer other than the condition referred to in subsection 17(1) shall be fulfilled within twenty-one days-
(a) after the first closing date of the take-over offer; or
(b) After the condition referred to in subsection 17(1) is fulfilled, whichever is the later.
(2) The date in subsection (1) shall not be later than seven days after the sixtieth day from the date on which the offer document was posted in accordance with subsection 13(7) failing which the take-over offer shall lapse.
(3) Upon the conditions to a voluntary offer being met, the offeror shall announce such fact in a press notice immediately.
Cases Referred (1) In the case of a mandatory offer, the offeror in any take-over offer shall offer as consideration that is to be paid or provided for the acceptances of the take-over offer an amount of not less than the highest price (excluding stamp duty and commission) paid or agreed to be paid by the offeror or any person acting in concert with the offeror for any voting shares to which the take-over offer relates within six months prior to the beginning of the offer period.
(2) Where the offeror or any person acting in concert with the offeror has purchased or agreed to purchase any voting shares to which the take-over offer relates during the offer period at a consideration that is higher than the consideration stated in the offer document to be paid or provided for the acceptances of the take-over offer, the offeror shall increase the consideration that is to be paid or provided for the acceptances of the take- over offer to not less than the highest price
22. Duration of offer. (1) An offeror must keep a take-over offer open for acceptances for a period of not less than twenty-one days from the date the offer document is first posted in accordance with subsection 13(7).
(2) Where there is a competing take-over offer made during the period referred to in subsection (1), the offer document sent by the offeror shall be deemed to have been posted on the date that the competing take-over offer document was posted.
23. Revisions of a take-over offer. (1) Where an offeror revises or is required to revise the offeror's take-over offer, the offeror shall-
(a) post the written notification of the revised take-over offer to all offeree shareholders, including all offeree shareholders who have accepted the original take-over offer; and (b) keep the take-over offer open for acceptances for at least another fourteen days from the date of posting of the written notification of the revised take-over offer in paragraph (1)(a).
(2) The offeror shall state the next expiry date of a take-over offer in any announcement of extension of time for accepting the take-over offer.
(3) An offeror shall not revise it take-over offer, or cause a take-over offer to be revised, after forty-six days from the date on which the offer document was posted in accordance with subsection 13(7).
(4) Where a competing take-over offer has been announced an offeror shall not
revise the offeror's take-ov
24. Closing of take-over offers. (1) A take-over offer shall be deemed to close prior to the expiry period which is stated in the offer document when-
(a) the offeror receives acceptances amounting to all of the voting shares to which the take-over offer relates;
(b) the offeree shareholders have received the independent advice circular under section 15 if this requirement of appointment of an independent adviser has not been exempted in writing by the Commission; and (c) the offeror has made an announcement under section 25.
(1A) Where a take-over offer has already become or been declared unconditional as to acceptances as at the date of the posting of the offer document in accordance with subsection 13(7), the closing date of the take-over offer shall not be later than the sixtieth day from such posting date.
[ Ins. P.U.(B) 139/2004: s. 12 ]
(2) Where a take-over offer has become or is declared unconditional as to
acceptances on any day before t
25. Announcement of acceptances. (1) If the securities or voting shares of the offeror or offeree are listed on a stock exchange, the offeror shall inform the Commission and the relevant stock exchange and announce by way of press notice on the market day following the day on which a take-over offer is closed, becomes or is declared unconditional as to acceptances, revised or extended --
(a) the position of the take-over offer, that is, as to whether the take- over offer is closed, becomes or is declared unconditional as to acceptances, revised or extended; and (b) the total number of voting shares to which the take-over offer relates --
(i) for which acceptances of the take-over offer have been received after the posting of the offer document by the offeror to the offeree shareholders in accordance with subsection 13(7);
(ii) held by the offeror and all persons acting in concert with the offeror
at the time of the posting of the offer document to the offeree
26. Identity of offeror, persons acting in concert and ultimate offeror. (1) A person who conducts discussions or negotiations on behalf of a proposed offeror with a person with a view to a take-over offer being made for the voting shares of a company shall disclose to the other person at the beginning of the discussions or negotiations the identity of--
(a) the proposed offeror and all persons acting in concert with the proposed offeror; and (b) the ultimate offeror, if applicable.
(2) In this section, "ultimate offeror" includes--
(a) a person in accordance with whose directions and instructions the proposed offeror or any person acting in concert with the proposed offeror is accustomed to act; or
(b) a person having an interest in the proposed take-over offer pursuant to an agreement, arrangement or understanding with the proposed offeror or any person acting in concert with the proposed offeror.
[ Subs. P.U.(B) 139/2004: s. 13 ]
(2) In
27. Evidence of ability to implement the take-over offer. Where the offer is for cash or includes an element of cash, a person who is required to make an announcement under subsection 12(1) or 12(3) shall ensure and the person's financial adviser shall be reasonably satisfied that --
(a) the take-over offer would not fail due to the insufficient financial capability of the offeror; and (b) every offeree shareholder who wishes to accept the take-over offer will be paid in full.
[ Subs. P.U.(B) 139/2004: s. 14 ]
[The former section 27 reads as follows]
A person who is required to make an announcement under subsection 12(1) or 12(3) shall ensure and the person's financial adviser is reasonably satisfied that--
(a) the take-over offer would not fail due to insufficient financial capability of the offeror; and (b) every offeree shareholder who wishes to accept the take-over offer will be paid in full.
28. Favourable deals. The offeror shall not enter into any agreement, arrangement or understanding to deal in or make purchases or sales of voting shares of the offeree, either during a take-over offer or when such a take-over offer is reasonably in contemplation by the offeror if such agreement, arrangement or understanding to deal have attached thereto favourable conditions which are being extended to all offeree shareholders.
29. Comparable take-over offers for more than one class of share capital (1) Where an offeree has more than one class of share capital, the offeror shall make a comparable take-over offer for each class of share capital on terms which shall be approved by the Commission.
(2) Classes of share capital which are not voting shares and which do not entitle the holder thereof to any right to participate beyond a specified amount in any distribution, whether by way of dividend, or on redemption, in a winding up, or otherwise, need not be the. subject of an offer except in the circumstances referred to in section 30.
(3) An offeror shall not make a take-over offer for share capital other than
voting shares to which the take-over offer relates which is conditional on any
particular level of acceptances in respect of that class of share capital
unless the take-over offer for such voting shares is also conditional on the
success of the take-over offer for the class of share capi
30. Treatment of convertible securities. (1) Where a take-over offer is made for the voting shares of an offeree and the offeree has issued convertible securities, the offeror shall make a take- over offer to purchase those securities and shall make appropriate arrangements to ensure that the interests of holders of convertible securities are safeguarded.
(2) The offeror shall post the take-over offer document to purchase the securities referred to in subsection (1) to the holders of the convertible securities at the same time that the offer document is posted to the offeree shareholders in accordance with subsection 13(7).
(3) The take-over offer to holders of the convertible securities referred to in subsection (1) may be effected by the way of a scheme approved at a meeting of the holders of the convertible securities.
31. Compulsory acquisition. (1) Where an offeror makes a take-over offer for more than one class of shares, separate offers must be made for each class and the offeror shall state, if the offeror intends to resort to compulsory acquisition powers under section 34 of the Act, that the section will be used only in respect of each class separately.
(2) The forms set out in Schedule 3 are prescribed for use under sections 34 and 34A of the Act, as the case may be.
[ Am. P.U.(B) 139/2004 : s. 15 ]
32. Sales and disclosure of dealings by offeror etc. during offer period. (1) During the offer period, the offeror or any person acting in concert with the offeror shall not dispose any voting shares of the offeree, whether by way of sale, transfer or otherwise, unless the disposal of such shares is between the offeror and persons acting in concert with him.
[ Subs. P.U.(B) 139/2004: s. 16 ]
(2) [ Deleted by P.U.(B) 139/2004: s. 16 ]
(3) Without prejudice to subsection 11(5), the following persons shall disclose the total number and price of all voting shares of the offeror and the offeree which are dealt in for their own account during the offer period:
[ Am. P.U.(B) 139/2004: s. 16 ]
(a) the offeror and all persons acting in concert with the offeror;
(b) in the case of a securities exchange offer, a major shareholder of the offeror;
[ Am. P.U.(B) 139/2004: s. 16 ]
(c) any chief executive, a director or an officer of the offe
33. Restrictions if take-over offer is withdrawn or lapses. (1) An offeror or any person acting in concert with the offeror shall not withdraw a take-over offer without the prior written approval of the Commission.
(2) Where a take-over offer has been withdrawn or has lapsed, the offeror and all persons acting in concert with the offeror shall not within twelve months from the date on which such take-over was withdrawn or lapsed-
(a) make a take-over offer for the voting shares that had been the subject of the previous take-over offer; or
(b) acquire any voting shares of the offeree if the offeror would thereby become obliged to make a mandatory offer; or
(c) acquire any voting shares of the offeree if the offeror holds voting shares carrying over 48% but more than 50% of the voting rights of the class of voting shares that had been the subject of the previous take-over offer.
(3) The offeror and all persons acting in concert with the offeror shal
34. Information to competing offeror. An offeree or board of directors of the offeree who gives any information, including particulars of offeree shareholders, to an offeror shall give the same information to another bona fide potential offeror upon request.
35. Frustration of offer by a board of directors of the offeree. (1) The board of directors of the offeree shall not; without the approval of the shareholders in a general meeting, either before the date of receipt of the written notice of take-over offer under subsection 12(2) or paragraph 12(3)(a) if the board of directors of the offeree has reason to believe that a bona fide take-over offer might be imminent, or during the course of a take- over offer-
(a) issue any authorised but unissued shares of the offeree;
(b) issue or grant options in respect of any unissued shares of the offeree;
(c) create or issue or permit the creation or subscription of any shares of the offeree;
(d) sell, dispose of or acquire or agree to sell, dispose of or acquire assets of the offeree of a material amount; or
(e) 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.
<36. Disclosure of dealings by offeree etc. during offer period. (1) During the offer period the total number and price of all voting shares of the offeror and the offeree which are dealt in by following persons shall be disclosed by them respectively (a) the offeree;
(b) major shareholders of the offeree;
[ Am. P.U.(B) 139/2004: s. 17 ]
(c) any chief executive, a director or officer of the offeree who occupies or acts in a senior managerial position in the offeree, by whatever name called, and whether or not he is a director;
(d) a person who is a connected person in relation to persons referred to in paragraphs (a), (b) and (c); and (e) a person who is accustomed to act in accordance with directions or instructions of the persons referred to in paragraph (a), (b), (c) or (d).
(2) The disclosure under subsection (1) shall be --
(a) made to the relevant stock exchange, if the securities of the offeror or
the offeree are listed on the relevan
37. Prompt registration of transfers. (1) The board of directors and officers of an offeree shall ensure the prompt registration of the offeree shareholders in the register of members maintained under section 158 of the Companies Act 1965.
[Am. P.U.(B) 139/2004: s. 18]
(2) The board of directors and officers of an offeree shall provide a person who intends or proposes to make a take-over offer with the register of members as may be required by such person.
38. False or misleading information etc. (1) No person shall-
(a) provide or cause to be provided to the holders of voting shares or their professional advisers any document or information in relation to or in connection with a take-over offer or compulsory acquisition that is false or misleading;
[ Am. P.U.(B) 139/2004: s. 19 ]
(b) provide or cause to be provided to holders of voting shares or their professional advisers any document or information in relation to or in connection with a take-over offer or compulsory acquisition from which there is material omission; or
[ Am. P.U.(B) 139/2004: s. 19 ]
(c) engage in conduct relating to a take-over offer or compulsory acquisition that he or it knows to be misleading or deceptive or is likely to mislead or deceive holders of voting shares or their professional advisers.
[ Am. P.U.(B) 139/2004: s. 19 ]
(2) It shall be a defence to a prosecution or any proceeding for a
contravention of su
39. Submission of information and compliance with directions. A person involved in a take-over offer, merger or compulsory acquisition shall submit such information to the Commission as it may require from time to time and comply with any requirements as may be imposed by the Commission.
40. Extension of time. The Commission may extend the time for compliance with any provision of this code.
41. Contravention of requirements, directions, restrictions and conditions. No person shall fail to comply with any provision of this code , any requirement made, or any direction, condition or restriction as may be imposed under this code.
42. Repeal and transitional. Cases Referred (1) The Malaysian code on Take-overs and Mergers 1987 [P.U.(B) 173/87], guidelines and practice notes made under it are repealed.
(2) For the avoidance of doubt, the provisions introduced or amended by this code shall apply to take-over offers, mergers or compulsory acquisitions made before or pending at the date of coming into operation of this code.
[ Am. P.U.(B) 139/2004: s. 20 ]
SCHEDULE 2
1. The offeror shall state the following in the offer document- (a) the identity of the ultimate offeror disclosed under section 26;
(b) information regarding the offeror including the names of its directors and the names of shareholders who hold 5% or more of the voting shares of the offeror and the extent of their holdings;
(c) whether the offeror has any intentions regarding the continuation of the business of the offeree, and if so, stating the offeror's intentions;
(d) the offeror's stated intent
(1) This code may be cited as the Malaysian code On Take-Overs and Mergers 1998.
(2) This code shall come into operation on 1st January 1999
Cases Referred (1) In this code , unless the context otherwise requires --
"business day" refers to a day which is not a Saturday, Sunday or public holiday;
[ Ins. P.U.(B) 139/2004: s.2 ]
"chief executive" has the same meaning as is assigned to that expression in subsection 2(1) of the Securities Industry Act 1983 [ Act 280 ];
"company" [ Deleted by P.U.(B) 139/2004: s. 2 ]
"competing take-over offer" in relation to an offeror, does not include a take-over offer that has been revised by the offeror;
"convertible securities" means securities such as warrants options and other securities that are issued by the offeror or offeree which are convertible into new voting shares of the offeror or offeree;
"director" has the same meaning as is assigned to that expression in the Companies Act 1965 [ Act 125 ];
"major shareholder" means a person who has an interest in the voting shares of a company and the aggregate amount of
Where a provision in this code requires a document to be posted, then, until the contrary is proved, delivery of the document--
(1) Part II shall only apply to mandatory offers.
(2) Part III shall only apply to partial offers.
(3) Unless otherwise stated, Part IV to IX shall apply to mandatory offers and voluntary offers, including partial offers.
(1) Part II shall only apply to mandatory offers.
(2) Part III shall only apply to partial offers.
(3) Unless otherwise stated, Part IV to IX shall apply to mandatory offers and voluntary offers, including partial offers.
Cases Referred (1) This Part applies to --
(a) an acquirer; or
[ Am. P.U.(B) 139/2004: s. 4 ]
(b) an acquirer who holds more than 33% but less than 50% of the voting shares of a company and such acquirer acquires or intends to acquire in any period of six months more than 2% of the voting shares of the company.
[ Am. P.U.(B) 139/2004: s. 4 ]
(2) Nothing in this Part shall apply to --
(a) an acquisition, or holding of, or entitlement to exercise or control the exercise of, more than 33% of the voting shares of a company by an allotment made in accordance with a proposal, particulars of which were set out in a prospectus where-
(i) the prospectus was the first prospectus for an initial public offer of voting shares issued by the company;
(ii) the person who acquired the voting shares was a promoter in respect of the prospectus and the effect of the acquisition on the person's voting power in the company has been discl
Cases Referred An acquirer shall not-
(a) appoint any director to the board of directors of the offeree; or
(b) exercise the voting rights attached to the voting shares which have been acquired by the acquirer, before the acquirer sends an offer document in accordance with subsection 13(7) to offeree shareholders.
(1) Unless otherwise approved by the Commission in writing, an offeror shall not include any other condition in a mandatory offer other than the condition specified under subsection 17(1).
(2) Where the offeror has acquired or already holds or is entitled to acquire or hold more than 50% of the voting shares of the offeree, the mandatory offer shall not contain the condition specified under subsection 17(1).
[ Am. P.U.(B) 139/2004: s. 5 ]
An offeror shall provide --
(a) that the consideration for the mandatory offer that is to be paid, or provided, for the acquisition of the voting shares to which the mandatory offer relates consists solely of a cash sum; or
(b) that where the consideration which triggers the mandatory offer obligation does not solely consist of a cash sum, an alternative form of consideration consisting solely of a cash sum.
[ Subs. P.U.(B) 139/2004: s. 6 ]
[The former section 9 reads as follows]
(1) An offeror shall ensure that the consideration for the mandatory offer that is to be paid, or provided, for the acquisition of the voting shares to which the mandatory offer relates shall--
(a) consist solely of a cash sum; or
(b) where there is more than one consideration, one consideration shall consist solely of a cash sum.
(2) Where an offeror obtains control in a company by way of a share exchange, the offeror shall ensure that the
A person who intends to sell his or its voting shares to an acquirer shall not resign as director or cause a director who is accustomed to act in accordance with his or its directions or instructions to resign, as the case may be, from the board of directors of the offeree until the first closing date of the take-over offer or the date when the take-over offer becomes or is declared unconditional as to acceptances, whichever is the later.
(1) Unless otherwise approved by the Commission in writing, no person shall make a partial offer.
(2) An offeror in a partial offer shall offer to acquire the same percentage of voting shares to which the take-over offer relates from all offeree shareholders.
(3) An offeror in a partial offer shall accept all acceptances from all offeree shareholders who wish to accept the take-over offer up to the percentage of voting shares proposed- to be acquired by the offeror.
(4) Where an offeror in a partial offer obtains acceptances totalling more than the percentage of voting shares offered to be acquired in the take-over offer but less than that required to give effect to subsection (3), the offeror shall accept such voting shares in the same proportion from each offeree shareholder who has accepted the offer in excess of the percentage of voting shares proposed to be acquired by the offeror to the extent necessary to enable the offeror to obtain the total
(1) 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.
(2) In the case of a voluntary offer, the person referred to in subsection (1) shall simultaneously send a written notice containing the information that is specified in subsection (4) to--
(a) the board of directors of the company or an adviser designated by the board of directors of the company;
(b) the relevant stock exchange, if the securities of the company or the voting shares are listed on the relevant stock exchange; and (c) the Commission.
(3) 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-
(a) immediately send a written notice of the take-over offer to-
(i
(1) In the case of a voluntary offer, where-
(a) 10% or more of the voting shares to which the take-over offer relates of the offeree has been purchased for cash by the offeror or any person acting in concert with the offerer during the offer period or within six months prior to the beginning of the offer period; or
(b) the Commission determines that it is necessary, the offeror shall offer as consideration that is to be paid or provided for the acceptances of the take-over offer a cash sum or where there is more than one consideration, one consideration shall consist solely of a cash sum at not less than the highest price (excluding stamp duty and commission) paid for such voting shares purchased during the offer period or within six months prior to the beginning of the offer period (2) Where the offeror offers unlisted securities as consideration to be paid or provided for the acceptances of a take-over offer, the offeror shall disclose in the offer docum
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