The Securities Industry Council (SIC) issued Takeovers Bulletin 3/2017 (Bulletin) on 31 July 2017. The Bulletin sets out the SIC’s views on the following matters:

  • The information to be provided to a competing offeror in the case of a management buyout: Rule 9.2 of the Code of Take-overs and Mergers (Code) states that information provided to one offeror should, on request, be provided equally to any other bona fide offeror. In the case of a management buy-out, where a competing offeror seeks to rely on Rule 9.2 to request for information, if the offeree board intends to refuse the information request, it should consult with the Secretariat of the SIC and justify its intention to do so. The potential offeror could be required to explain why the information requested is material in the context of making an offer and why he should be considered a bona fide potential offeror.
  • How it will regard a single member of a sub-group in a concert party acquiring more than 49% of the voting rights of a company: Such an acquisition is likely to be considered a significant change in the balance between the shareholdings in the group. This is because with more than 49% the single member or sub-group would have the freedom to move to more than 50% without incurring a mandatory offer, and would then no longer need to act in concert with other members of the group to have statutory control of the company. Accordingly, the SIC is likely to require that the member make a mandatory offer. A single member or sub-group within a concert-party group that holds in aggregate more than 50% should consult the Secretariat before acquiring voting rights in excess of the mandatory offer thresholds.
  • What the opinion of an independent financial adviser (IFA) as to an offer being “not fair but reasonable” should mean: A opinion that an offer is “not fair but reasonable” should only be given on the basis that the IFA is of the view that despite the offer being “not fair”, it is “reasonable” after taking into account other matters as well as the value of the offeree securities.