Take-over process
In a take-over situation, the moment the acquirer/offeror proposes to carry out a mandatory or a voluntary offer, the offeror is required to announce and subsequently submit a written notice to the Securities Commission, Bursa Malaysia and the Board of Directors of the target company. The press will also be informed. The Board of Directors of the target company will then notify its shareholders of the potential take-over plan.
Subsequently, the offeror will send an offer document to all the target company’s shareholders within 35 days from the date of the written notice. The offer document should provide detailed descriptions of the offer including—
- the identity of the offeror;
- the offeror’s financial standings and capability to carry out the offer;
- terms and conditions of the offer, including the offer price;
- the offeror’s shareholding in the target company; and
- other information specified by the Code of Take-overs and Mergers in Malaysia 1998, such as disclosure of dealings by the offeror and persons acting in concert.
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The Board of Directors of the target company will then appoint an Independent Adviser, usually a merchant bank, to advise the board and the rest of the shareholders on whether they should accept or reject the offer. The advice will be distributed in the form of an “independent advice circular” to all the shareholders of the target company. In essence, the circular contains the recommendation from the Board of Directors and the independent adviser about the offer.
Normally, the offer period will remain open for at least 21 days from the date the offer documents were sent. The offeror must announce the status of the offer, such as the level of shareholders’ acceptances and any revisions to the offer (if any) during the offer period. Subsequently, after the offer period is closed, the offeror will announce the outcome of the take-over exercise.
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