Webinar | Overview of the SFC’s Code on Takeovers and Mergers | 24 December 2024

The Code on Takeovers and Mergers, also known as the Takeovers Code, was introduced in Hong Kong in 1975 and is voluntary, relying on market participants' willingness to comply rather than legal enforcement. The Code is overseen by the Executive Director of the Corporate Finance Division of the SFC and applies to public companies and those with a primary listing in Hong Kong.

Breaches may result in private reprimands, public censures, or compensation requirements for shareholders. The Takeovers Code outlines ten general principles to ensure fair treatment of shareholders and has specific rules covering voluntary and mandatory offers. Voluntary offers can include conditions unless they are within the control of the offeror or offeree, while mandatory offers are required if the offeror gains over 30% of voting rights.

Both types of offers have specific provisions regarding offer prices, share acquisitions, and cash alternatives. Advisors, including financial and legal experts, play key roles in advising companies during offers and ensuring compliance with the Code. Announcements must be made under certain conditions, such as when takeovers become imminent or during share price fluctuations.

Disclosure rules require that dealings in securities by offer parties and associates be reported, while insider dealing provisions aim to prevent misuse of price-sensitive information. Directors bear obligations to act in the best interests of their company, comply with the code, and ensure accurate information is provided, with the overall aim of safeguarding shareholder interests.

#TakeoversCode #CorporateFinance #HongKongMergers

Timecodes:
00:00 Introduction to the Takeovers Code
01:47 General Principles of the Takeovers Code
03:19 Voluntary and Mandatory Offers
09:13 Conditions and Waivers for Mandatory Offers
16:50 Advisors and Dissemination of Information
23:51 Announcements and Disclosure During Offers
32:42 Insider Dealing and Securities Restrictions
39:17 Offer Documents and Shareholders’ Rights
56:26 Director Responsibilities and Conclusion

Charltons Law Firm:
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Julia Charlton
https://www.charltonslaw.com/the-firm/people-culture/team-profile/julia-charlton/

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