New Rules Regarding Competing Takeover Bids

The revised executive order defines a competing takeover bid as a takeover bid made on a listed company by way of an announcement, where a different takeover bid on the same company has been announced, but not ended.

It has been clarified that a change to an announced takeover bid does not constitute a competing bid. This means that a competing bid by a second bidder cannot be withdrawn on the basis that the first bidder makes changes to its original takeover bid, e.g. in order to make it attractive for the shareholders. In this case, the competing bidder will have to finalize its offer in accordance with its terms, unless a third party makes an additional competing bid. In should be noted that although the offer may not be withdrawn, the bidder is only obligated to complete the offer if the conditions therein have been met, e.g. with respect to approval thresholds. It is therefore even more important for bidders to implement a condition regarding minimum acceptance level from the shareholders.

In the event of a competing bid, an existing takeover bid may be withdrawn within five (5) business days from either (i) the date of the announcement of the decision to make a competing bid or (ii) the publication of the offer document regarding the competing bid.

If more than one bid is made on a listed company, such company’s shareholders may withdraw their acceptance of a takeover bid within three (3) business days from (i) the publication of an offer document or (ii) from the publication of an amendment.

The offer period for the competing bid may not be shorter than the offer period in the announced takeover bid, and the offer period in the announced takeover bid must be extended to the period as set out in the competing bid. Such extension of the offer period must be made by way of an amendment to the offer document.

If the offer period of any other bid is extended – either due to such other bidder deciding to extend the period or due to an amendment to such bid – the offer period for the other bids must be extended similarly. However, if an offer period is extended as a consequence of the takeover bid awaiting approval from the authorities, such rule will not be applicable if the other bidders are not awaiting such approval from the authorities.

In the event that multiple bids are made on a listed company, the board of directors in such company is required to prepare a statement for all takeover bids which must be announced within the first half of the offer period for the offer document most recently announced.



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