Under the new takeovers code, effective 1 September 2006, partial offers are allowed in two circumstances: voluntary offers, and when the offeror acquires more than 30% through "on market" purchases. Partial offers must be for a minimum of 5% of the shares of the target. Shares must be acquired proportionately.
An offer price may not be lower than the highest price paid by the offeror during the six-month period prior to the date of the offer announcement. If the offer price is lower than the mean of the daily weighted average price during the 30-day period prior to the offer announcement, the financial adviser must determine if the price is reasonable or if the price has been subject to manipulation or other irregularity. The 90% discount under the 2002 code is no longer available.
The new code emphasizes the advisory and monitoring functions of financial advisers qualified in China.
The new takeovers code is applicable to foreign investors, whether in the form of qualified foreign institutional investors or strategic "G" share investors.