SIC seeks views on proposed takeovers, mergers code changes

Move aimed at enhancing regulation of such deals, better protection of minority interests

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The Securities Industry Council (SIC) on May 5 issued a consultation paper on amendments to Singapore's Code on Takeovers and Mergers, with the aim to enhance regulation around such deals.

The proposed changes intend to protect the competitive process of takeover and merger transactions, improve the timeliness of schemes of arrangement, and enhance disclosures to investors and shareholders.

A key proposal to safeguard the competitive process for potential offerors is regulating deal protection measures, except in limited circumstances. These measures—such as break fees that an offeree agrees to pay an initial offeror if this offeror's deal should not succeed—could deter higher offers from competing parties, said SIC.

The advisory board also proposed the implementation of rules to ensure that schemes of arrangement meant for takeovers are certain and timely.

For example, an offeror should take the necessary steps to make an offer effective "without delay" once shareholders have approved the scheme. The meeting to approve such a scheme to effect a takeover or merger should also be held within six months of the scheme's announcement, said SIC.