HONG KONG: SFC issues Hong Kong Takeovers Bulletin Issue 30

Tuesday September 30 2014

The Securities and Futures Commission has published the Hong Kong Takeovers Bulletin No. 30.

The bulletin provides guidance and interpretation as below:

Application of Note 3 to Rule 22 to associates when an offer is unconditional at the outset

Rule 22 of the Takeovers Code requires parties to an offer and their respective associates (5% shareholders) to disclose their dealings in relevant securities of the offeree company (and the offeror in securities exchange offers) conducted for themselves or on behalf of discretionary clients.

Note 3 to Rule 22 provides that dealings by associates (other than persons acting in concert with any offeror) need not be disclosed during the period between the date when the offer becomes or is declared unconditional in all respects and the end of the offer period.

The SFC has been consulted on a number of occasions about the application of Note 3 to offers that are unconditional in all respects at the outset. In these cases, the SFC has clarified that so long as they are not concert parties of an offeror, associates are only required to disclose dealings that take place from the date of commencement of the offer period to the date of despatch of the offer document or composite document.

Reminder to submit Code documents to the Executive for comment prior to release or publication

Rule 12.1 of the Takeovers Code requires all Code-related announcements and documents (other than announcements appearing in the Post-Vet List) to be “filed with the Executive for comment prior to release or publication and must not be released or published until the Executive has confirmed that it has no further comments thereon.”

In order to comply with this Rule, the SFC has reminded participants that “document” is defined in the Codes to include any announcement, advertisement or document issued or published by a party to an offer or possible offer in connection with such offer or possible offer, other than documents required to be put on display under Notes 1 and 2 to Rule 8 of the Takeovers Code. The definition of “document” also includes any announcement, advertisement or document issued or published by any person in connection with a transaction:
(1) where a ruling is sought that no offer obligation arises;
(2) which is stated to be conditional on no such offer obligation arising; or
(3) which is stated to be conditional on a ruling being given that no such offer obligation arises.

There is also guidance on confirmations of past shareholdings in placing and top-up transactions under Rule 26.

Click on the above link for more details.