Mandatory, voluntary offers under Hong Kong takeover and mergers code

By Rossana Chu, Ricky Ho:

Takeovers and mergers of public companies in Hong Kong are primarily governed by the Hong Kong Code on Takeovers and Mergers, which is administered by the executive director of the Securities and Futures Commission’s (SFC) corporate finance division.

The scope of “public companies” under the domain of the code include Hong Kong-listed companies (whether or not incorporated in Hong Kong) and non-listed public companies incorporated in Hong Kong.

Normally, after an investor has acquired voting rights in a public company to a certain extent from existing shareholders or the open market, the code requires it to make a mandatory general offer to acquire the securities held by other shareholders of the company. The purpose is to give an exit opportunity to those other shareholders when the controlling interest in the company has changed hands.

Alternatively, the investor may acquire the controlling interest in a public company in one go, by putting forward a voluntary general or partial offer to the other shareholders.  READ FULL ARTICLE

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Note: This material has been prepared for general information purposes only and is not intended to be relied upon as professional advice for any cases. Should you need further information or legal advice, please contact us.