The Securities Industry Council (SIC) has released a consultation paper proposing amendments to the Singapore Code on Take-overs and Mergers, last updated in 2019.
The changes seek to reflect market developments, align with international practices, and enhance oversight of take-over and merger activity.
The proposals, developed following discussions with market practitioners, focus on protecting the competitive process, improving the timeliness of transactions, and ensuring shareholders receive clearer disclosures throughout a deal.
Key Proposed Amendments to the Code on Take-overs and Mergers
One key amendment would restrict deal protection measures such as break fees, which can deter competing bids.
These would generally be prohibited, except under limited circumstances—such as during formal sale processes or to secure a white knight—with any break fee capped at 1% of the offer value.
To improve procedural certainty in take-overs via schemes of arrangement, the SIC proposes requiring scheme meetings to be held within six months of announcement.
Once shareholder approval is obtained, offerors would be required to proceed without delay to make the scheme effective.
Other proposals aim to reduce market speculation. Offerors who make “no increase” or “no extension” statements would be bound by them, with a six-month restriction period imposed before launching any revised offer.
Potential offerors who have made holding announcements would be required to clarify their intentions within 28 calendar days.
If an indicative offer price is disclosed beforehand, any subsequent offer must match or exceed that price, unless a lower price is permitted by the SIC in exceptional circumstances.
The SIC also proposes strengthening rules around frustrating actions, such as a competing asset sale that may prevent shareholders from evaluating an offer.
In such cases, the offeree board would need to disclose the expected cash return to shareholders and obtain independent advice if shareholder approval is required.
Other frustrating actions covered include material acquisitions or disposals, changes to capital structure, or alterations to dividend policy.
Additional proposed changes include updates to definitions in the code, requirements that any information shared with one offeror must also be provided to all other competing offerors, disclosure of offer-related fees, rules specifying the validity period and valuation date for valuation reports, and guidance on the appropriate use of social media and other channels for offer-related announcements.
Public feedback on the proposed amendments is open until 5 June 2025.
The consultation paper is available at www.mas.gov.sg/sic, and written comments may be submitted via email to sic@mas.gov.sg.
