MAS tweaks code on take-overs and mergers

It will provide more certainty in cases of competing offers.

The Monetary Authority of Singapore (MAS) has amended the Singapore Code on Take-overs and Mergers.

The amendments seek to provide greater certainty in the event that there are competing offers. The changes were completed on the advice of the Securities Industry Council, and followed a public consultation held in July last year.

In the event that there are competing offers, companies will be required to clarify that the offer timetables will be aligned to that of the latest offer, and will be tasked to prescribe a default auction procedure, if neither offeror has declared its final offer price in the later stages of the offer period.

The deadline for a potential competing offeror to announce a competing offer has also been extended to increase the prospects of a competing offer that will benefit offeree company shareholders.

Other amendments include encouraging pro-active offeree boards and providing a more timely disclosure of material information.

Under the new Code, soliciting a competing offer or running a sale process does not amount to frustration of the existing offer, and offeree board may consider sharing available management projections and forecasts with the independent financial adviser.

The Code will also now require earlier disclosure of any material change to information previously published in an offer.

The new Code also streamlines existing practices by clarifying the standards that are required of pre-conditions in a pre-conditional voluntary offer, allowing the offeree company to post the offer document at an earlier date in a pre-conditional offer, and clarifying how the offer value for a different class of shares, such as preference shares, should be calculated.

The amendments take effect on 25 Mar 2016.