Singapore Takeover & Merger Code
The Singapore Code on Take-Overs and Mergers
The Singapore Code on Take-overs and Mergers (the "Code") is a set of voluntary guidelines that regulate takeovers and mergers in Singapore. It is not a law, but it is widely followed by companies and investors in Singapore.
The Code is administered by the Singapore Exchange (SGX) and is based on international best practices. It is designed to ensure fair treatment of all shareholders, promote transparency, and maintain market integrity.
The Code covers a wide range of topics, including:
The definition of a takeover
The obligations of offerors and target companies
The conduct of takeover bids
The treatment of minority shareholders
The disclosure of information
The settlement of disputes
The Code is regularly updated to reflect changes in the law and market practices. It is a valuable resource for companies and investors who are involved in takeovers and mergers in Singapore.
The Definition of a Takeover
A takeover, also known as an acquisition, occurs when one company (the acquirer) purchases a controlling interest in another company (the target). This can be achieved through various methods, such as:
Merger: Both companies agree to combine into a single entity.
Tender Offer: The acquirer offers to buy shares directly from the target company's shareholders.
Asset Purchase: The acquirer purchases specific assets or divisions of the target company.
Proxy Fight: The acquirer seeks to gain control of the target company by persuading its shareholders to vote for the acquirer's nominees to the board of directors.
The Obligations of Offerors and Target Companies
Both offerors and target companies have specific obligations under the Singapore Code on Take-overs and Mergers. These include:
Fair Treatment of Shareholders: Both parties must treat all shareholders fairly, regardless of their size or location.
Disclosure of Information: Both parties must disclose all relevant information to shareholders in a timely and accurate manner.
Conduct of Bid: The offeror must conduct the bid in accordance with the Code's rules and regulations.
Negotiations: The target company may negotiate with the offeror, but it must do so in good faith and without unduly delaying the takeover process.
The Conduct of Takeover Bids
The Code sets out specific rules governing the conduct of takeover bids, including:
Offer Period: The offeror must set a minimum offer period during which shareholders can accept or reject the offer.
Price: The offeror must offer a fair price for the target company's shares.
Information: The offeror must provide shareholders with all relevant information about the offer, the target company, and the reasons for the takeover.
Acceptance: Shareholders must be able to accept or reject the offer freely and without undue influence.
The Treatment of Minority Shareholders
The Code provides protections for minority shareholders, who may be at a disadvantage in a takeover situation. These protections include:
Fair Compensation: Minority shareholders must receive fair compensation for their shares.
Voting Rights: Minority shareholders have the right to vote on the takeover.
Oppression Relief: Minority shareholders may seek relief if they are oppressed by the majority shareholders.
The Disclosure of Information
Both offerors and target companies must disclose all relevant information to shareholders in a timely and accurate manner. This includes information about:
The offer
The target company
The reasons for the takeover
The financial condition of both companies
Any potential conflicts of interest
The Settlement of Disputes
The Code provides a mechanism for resolving disputes between offerors and target companies. This mechanism is overseen by the Singapore Exchange.
Key Provisions of the Singapore Code on Take-overs and Mergers
Fair Treatment of Shareholders: The Code requires offerors to treat all shareholders fairly, regardless of their size or location. This includes providing equal treatment to all shareholders in terms of the offer price and the information provided.
Transparency: The Code requires offerors and target companies to disclose all relevant information to shareholders in a timely and accurate manner. This includes information about the offer, the target company, and the reasons for the takeover.
Bid Rigging: The Code prohibits bid rigging, which is the artificial manipulation of the price of a takeover bid. This is a serious offense that can result in penalties.
Minority Shareholders: The Code provides protections for minority shareholders, who may be at a disadvantage in a takeover situation. These protections include the right to receive fair compensation for their shares and the right to vote on the takeover.
Dispute Resolution: The Code provides a mechanism for resolving disputes between offerors and target companies. This mechanism is overseen by the SGX.
Compliance with the Code
Compliance with the Code is voluntary, but it is generally expected of all companies involved in takeovers and mergers in Singapore. Non-compliance with the Code can damage a company's reputation and may result in regulatory action.
Additional Resources
Singapore Exchange: https://www.sgx.com/
Singapore Companies Act: https://sso.agc.gov.sg/act/coa1967
How Gold House M&A Can Help
Gold House M&A is a leading mergers and acquisitions (M&A) advisory firm that specializes in helping businesses grow through strategic acquisitions, divestitures, and partnerships. Our team of experienced professionals can provide a wide range of services to help you achieve your M&A goals.
Here are some ways Gold House M&A can help your business:
Strategic Advisory
M&A Strategy Development: We can help you develop a customized M&A strategy that aligns with your business objectives.
Target Identification: Gold House M&A can identify potential acquisition targets that fit your strategic criteria.
Valuation: We can provide valuations for both your business and potential acquisition targets.
Due Diligence
Financial Due Diligence: Gold House M&A can conduct in-depth financial due diligence to assess the financial health of potential acquisition targets.
Legal Due Diligence: We can assist with legal due diligence to identify and mitigate potential legal risks.
Commercial Due Diligence: Gold House M&A can help you assess the commercial viability of potential acquisition targets.
Deal Execution
Negotiation: We can represent you in negotiations with potential acquisition targets or sellers.
Documentation: Gold House M&A can help you prepare and review all necessary legal documents, such as purchase agreements and confidentiality agreements.
Closing: We can assist with the closing process to ensure a smooth and efficient transaction.
Post-Merger Integration
Integration Planning: Gold House M&A can help you develop a comprehensive integration plan to ensure a successful merger or acquisition.
Cultural Integration: We can help you address cultural differences and integrate the acquired company into your organization.
Synergy Realization: Gold House M&A can help you identify and realize synergies between your business and the acquired company.
By partnering with Gold House M&A, you can benefit from our expertise and experience in the M&A process. Our team can help you navigate the complexities of M&A transactions and achieve your business growth objectives.
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