In order to fully protect the rights and interests of tenderers taking part in public tender offers and comply with Article 43-1, paragraph 1 of the Securities and Exchange Act, in which the threshold for filing and announcing large holdings has been revised to 5%, the Financial Supervisory Commission (FSC) plans to amend the “Regulations Governing Public Tender Offers for Securities of Public Companies” and the “Regulations Governing Information to be Published in Public Tender Offer Prospectuses.” The advance notice period has ended, and the amendments will be released soon. The key points of the amendments are as follows:
1. Amendments to some articles of the “Regulations Governing Public Tender Offers for Securities of Public Companies”:
(1) Relevant text is amended for compliance with Article 43-1, paragraph 1 of the Securities and Exchange Act, in which the threshold for filing and announcing large holdings has been revised to 5%.
(2) In order to strengthen the ability of the offeror to fulfill the settlement obligation, it is added that a certificate of ability to pay the consideration is required if the offeror provides domestic securities for the consideration.
(3) Considering that the stocks of TWSE- and TPEx-listed companies have been fully issued in scripless form, it is stipulated that when the number of shares to be sold exceeds the predetermined tender offer quantity, the offeror shall purchase the shares from all sellers on a pro rata basis with one share as the smallest unit, and the original provision that the public tender offer of stocks of TWSE- and TPEx-listed companies shall be on a pro rata basis with one thousand shares as the smallest unit is deleted.
(4) It is stipulated that the public tender offer period may be extended only once, and included in the provisions are some of the filing documents mentioned in the “Regulations Governing Information to be Published in Public Tender Offer Prospectuses” (such as a commitment letter for fulfilling the payment obligation, an independent expert’s appraisal opinion on the reasonableness of the price, and company resolution documents), in order to meet the requirement of authorization clarity. In addition, the conditions under witch a mandatory public tender offer shall not apply have been added, including a situation where the shares of public companies are obtained through share exchange in accordance with the Business Mergers and Acquisitions Act.
2. Amendments to some articles of the “Regulations Governing Information to be Published in Public Tender Offer Prospectuses”:
            In order to strengthen the disclosure of information regarding the use of domestic securities for payment of consideration, it is required that the offeror shall issue a commitment letter for fulfilling the obligation to pay consideration; in addition, if the offeror issues new securities for payment of consideration, it shall notify investors of the risks of adopting an alternative method in the event it is unable to issue such securities in time, and shall specify the alternative method for payment of consideration (cash or other securities) under such circumstances.
   
Contact unit: Transaction Group, Securities and Futures Bureau
Tel: (02) 2774-7130
If you have any questions, please write to:
http://fscmail.fsc.gov.tw/