香港资本市场并购讲座

THE HONG KONG TAKEOVERS CODE THE HONG KONG TAKEOVERS CODE

Ashley Alder (Partner)

Jason Sung (Partner)

Victor Ding (Senior Associate)

Victor Ding(Senior Associate)

13 May, 2011

Takeover under the HK Rules?

•Acquisition (or consolidation) of control of

- a public company in Hong Kong or

- a company with a primary listing of equity securities in Hong

Kong

•Will be governed by the Takeovers Code (and the HKSE Listing Rules and SFO)

•Control = 30% or more of voting rights

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The Takeovers Code

•Is the core rule book

•Is administered day to day by the Executive and policed by the Takeovers Panel

•Is underpinned by ten General Principles

I i t t d i d ith th ‘i it’ll th ‘l tt ’•Is interpreted in accordance with the ‘spirit’ as well as the ‘letter’•Special emphasis on responsibility and resources of Financial 2

y

Advisers –Introduction, para 1.7. Relevant to 1) Corporate Finance Advice, and 2) Compliance

Voluntary takeover offer

y

•Offeror able to impose conditions to its Offer

Off bl i di i i Off

•Offeror able to choose nature of Offer consideration

•The only method of structuring an offer which is conditional on achieving 100% privatisation and delisting of a target

achieving100%privatisation and delisting of a target

3

Mandatory takeover offer

•Acquisitions triggering mandatory bid: 30% control threshold / 2% control creeper

“creeper”

•Only condition permissible is acquisition of 50% of Target voting rights •Offer must be in cash/full cash alternative

Offer must be in cash/full cash alternative

•Concert parties

t d t di f l i f l t ti l -agreement or understanding, formal or informal, to actively co-operate to obtain or consolidate control through the acquisition of

voting rights

-includes a ‘nod or a wink’

-Inadvertent mandatory bids

•Merdeka Resources –case study

•China Oriental –case study

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Privatisations

1.Voluntary Offer

90%“Squeeze out”

-90% “Squeeze out”

-Upside ⇒Flexibility

-Downside ⇒Hard target

2.Scheme of Arrangement

Scheme of Arrangement

-Shareholder vote: dual 75% / 10% test

-Upside ⇒easier target

-Downside ⇒All or nothing; court process

H d f d il

-Hedge fund greenmail

Privatisations for Red-Chip Companies

1.Voluntary Offer (see Jilin Chemical (November 2005), Shanghai Forte

1V l t Off(Jili Ch i l(N b2005)Sh h i F t (February 2011))

2.Merger by Absorption (see Sinopec Beijing Yanhua (January 2005),

Sinopec Zhenhai Refining (November 2005))

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