Entire Section
Takeover Rules Module (TKO) [VER08/04-20]
TKO 1 TKO 1 Introduction and the Takeover Principles
TKO 1.1 TKO 1.1 The takeover rules
TKO 1.1.1
The
Rules in this Module (TKO) comprise the Takeover Rules referred to in the Markets Law 2012.Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]TKO 1.1.2 TKO 1.1.2
Unless the context otherwise provides, a reference to "Rules" in this Module is a reference to these Takeover Rules.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.1.2 Guidance
2. The purpose of theseRules is set out in Article 51 of the Markets Law 2012, being to:a. ensure that aTakeover takes place in an efficient, competitive, fair and informed market;b. ensure that shareholders are treated fairly and shareholders of the same class are treated the same; andc. provide an orderly framework within which aTakeover is conducted.3. TheRules throughout this Module are based upon and should be read in conjunction with theTakeover Principles as prescribed in TKO Section 1.5.4. TheRules are not concerned with the financial or commercial advantages or disadvantages of aTakeover . These are matters for theBidders andTargets and their shareholders.5. When there is any doubt whatsoever as to whether a proposed course of conduct is in accordance with theTakeover Principles or with other more specificRules , parties or their advisers should consult theDFSA in advance to obtain guidance.6.Takeover transactions may from time to time be subject to the dual jurisdiction of theDFSA and a regulator of another jurisdiction. In such cases, early consultation should take place with theDFSA as to how any conflicts between the relevant rules and regulations may be resolved. In appropriate circumstances, a waiver or modification from theseRules may be appropriate — see theGuidance to TKO Chapter 16.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]TKO 1.2 TKO 1.2 Application of these rules
TKO 1.2.1 TKO 1.2.1
The
Rules in this Module (TKO) apply toPersons to whom the Markets Law 2012 applies, and in particular:(a)Reporting Entities asTargets or potentialTargets under theRules ;(b)Bidders or potentialBidders and anyPerson acting in concert with them;(c)Directors and officers ofTargets andBidders ; and(d) professional advisers in relation to aTakeover transaction.Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]TKO 1.2.1 Guidance
1. TheRules apply toTakeover transactions, however effected, including:a. partialBids ;b.Bids by a parent entity forShares in its subsidiary; andc. certain other transactions where control of aReporting Entity is to be obtained or consolidated.2. EachDirector of aBidder and of theTarget has a responsibility to ensure, so far as he is reasonably able, that theseRules are complied with in the conduct of aBid . Financial advisers have a particular responsibility to comply with theRules and to ensure, so far as they are reasonably able, that aBidder and theTarget , and their respectiveDirectors , are aware of their responsibilities under theRules and will comply with them. Financial advisers should also be mindful of conflicts of interest.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.2.2
Subject to TKO Rule 1.2.3, the
Rules apply to offers or bids forShares of aReporting Entity , and also toConvertibles , options and subscription rights relating to aReporting Entity as provided TKO Section 6.2 of theRules .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.2.3 TKO 1.2.3
The
Rules do not apply in respect of offers or bids forShares of aPerson who is aReporting Entity solely by reason of one or more of the following:(a) thePerson has filed a prospectus with theDFSA under Article 14 of the Markets Law 2012 for the sole purpose of issuingSecurities that:(i) are notShares norSecurities that are convertible toShares ; and(ii) do not confer, directly or indirectly, a voting right;(b) thePerson has or had, at any time,Securities admitted to anOfficial List of Securities where suchSecurities :(i) are notShares norSecurities that are convertible toShares ; and(ii) do not confer, directly or indirectly, a voting right; or(c) thePerson merged with or acquired aReporting Entity to which, by reason of thisRule or otherwise, theseRules do not apply.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]TKO 1.2.3 Guidance
In exceptional cases, the
DFSA may waive or modify the application of theRules if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of theseRules . For example, theDFSA may, in appropriate circumstances, waive the application of theRules in relation to aPerson who is aReporting Entity solely by reason of theDFSA having declared that thePerson is aReporting Entity .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.3 TKO 1.3 Regulatory proceedings in the FMT
TKO 1.3.1 [Deleted]
[Deleted] DFSA RM142/2014 (Made 21st August 2014). [VER6/06-14]TKO 1.3.2 [Deleted]
[Deleted] DFSA RM142/2014 (Made 21st August 2014). [VER6/06-14]TKO 1.3 Guidance
Article 70(1)(c) of the Markets Law 2012 provides that the
FMT has jurisdiction to hear and determine regulatory proceedings in relation to an issue arising out of a takeover, takeover offer, merger or acquisition of shares. Article 29(3) of theRegulatory Law sets out who may bring a regulatory proceeding before theFMT .[Added] DFSA RM142/2014 (Made 21st August 2014). [VER6/06-14]TKO 1.4 TKO 1.4 Interpretation and definitions
TKO 1.4.1 TKO 1.4.1
For the purpose of these
Rules ,Persons , "acting in concert" comprisePersons , who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition by any of them ofShares in aReporting Entity , to obtain or consolidate control of thatReporting Entity .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.4.1 Guidance
The
DFSA will presume (without limiting the general application of the definition in the Markets Law 2012) that the followingPersons will be "acting in concert" with otherPersons in the same category unless the contrary is established:a. any of the following with each other: a company, its parent, subsidiaries and fellow subsidiaries, and their associated companies, and companies of which such companies are associated companies, (for this purpose ownership or control of 20% or more of the equityShare capital of a company is regarded as the test of associated company status);b. a company with any of itsDirectors (together with their close relatives and related trusts);c. a company with any of its pension funds;d. an investment manager with any investment company, unit trust, or otherPerson whose investments such investment manager manages on a discretionary basis, in respect of relevant investment accounts;e. a financial or other professional adviser (including a stockbroker) with its client in respect of the Shareholdings of the adviser andPersons controlling, controlled by or under the same control as the adviser; andf.Directors of aReporting Entity which is subject to aBid or where theDirectors have reason to believe a bona fideBid for theirReporting Entity may be imminent.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]TKO 1.4.2
For the purpose of these
Rules , a purchase for "cash" includes a contract or arrangement where the consideration consists of a debt instrument capable of being redeemed in less than 3 years.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.4.3
For the purpose of these
Rules , an investment manager or stockbroker will be "connected" with aBidder or theTarget , as the case may be, if the investment manager and/or stockbroker is controlled by, controls or is under the same control as:(a) aBidder ;(b) theTarget ;(c) any bank or financial or other professional advisers to aBidder or theTarget ; or(d) an investor in a consortium (for example, through a special purpose vehicle formed for the purpose of making aBid ).
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.4.4
For the purpose of these
Rules , "control" means a holding, or aggregate holdings, ofShares carrying 30% or more of the voting rights of aPerson , irrespective of whether the holding or holdings give de facto control, and includes control arising from acting in concert with another person or other persons.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.4.5
For the purpose of these
Rules , the "posting" of a document is effected by ordinary postal service delivery or by any other process of delivery which is reasonably certain to bring the contents of the document to the attention of the intended individual addressee.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.4.6
For the purpose of these
Rules , a "purchase" or other acquisition ofShares , where relevant, includes the purchase ofShares assented to aBid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.4.7
For the purpose of these
Rules , a "right" overShares includes any right acquired by aPerson by virtue of an agreement to purchaseShares or an option to acquireShares or an irrevocable commitment to accept aBid to be made by him or an agreement to acquire voting rights or general control of them.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.4.8
For the purpose of these
Rules , a "Securities Exchange Bid " is aBid in which the consideration includesSecurities of theBidder or any otherPerson .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.4.9 TKO 1.4.9
For the purpose of these
Rules , "voting rights" means all the voting rights attributable to theShare capital of aReporting Entity which are currently exercisable at a general meeting.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.4.9 Guidance
Where a waiver or modification is sought as per
Guidance Note 1 to TKO Rule 4.1.3, consideration should also be given as to whether the definition of "voting rights" will require consequential modification.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.5 TKO 1.5 The takeover principles
TKO 1.5.1
All shareholders of a
Target must be treated fairly by aBidder and all shareholders of the same class must be treated equally.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.5.2 TKO 1.5.2
During the course of a
Bid , or when aBid is contemplated, neither aBidder , nor aTarget , nor any of their respective advisers may furnish information to some shareholders which is not available to all shareholders. This principle does not apply to the furnishing of information in confidence by aTarget or its adviser to a bona fide potentialBidder or its adviser, or vice versa.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.5.2 Guidance
Where information is disclosed in confidence to a
Bidder orTarget , aDirector may receive material information in his capacity asDirector . ThatDirector , or his associates, may also hold shares in theBidder orTarget in a personal capacity. In these circumstances, aDirector should be mindful of his duties, including in relation to conflicts of interests and misuse of position.Directors should also be well aware of restrictions and prohibitions under the Markets Law 2012 including Article 42 relating to insider dealing.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]TKO 1.5.3
A
Bidder must only announce aBid :(a) after the most careful and responsible consideration; and(b) when theBidder has every reason to believe that it can and will continue to be able to implement theBid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.5.4
A
Bidder andTarget must:(a) give shareholders of theTarget sufficient time and information to enable them to reach a properly informed decision on aBid ; and(b) not withhold any material information from the shareholders of theTarget .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.5.5
Any document or advertisement addressed to shareholders containing information or advice from a
Bidder or theTarget or their respectiveGoverning Bodies or advisers must be prepared with the highest standards of fairness, care and accuracy.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.5.6
Bidders andTargets must use every endeavour to prevent the creation of a false market in theSecurities of aBidder or theShares of aTarget . Parties involved inBids must take care that statements are not made which may mislead shareholders or the market.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.5.7
At no time after a bona fide
Bid has been communicated to theGoverning Body of aTarget , or after theGoverning Body of aTarget has reason to believe that such aBid might be imminent, may any action be taken by theGoverning Body of theTarget , without the approval of the shareholders in general meeting, which could effectively result in any bona fideBid being frustrated or in the shareholders being denied an opportunity to decide on its merits.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.5.8
A
Bidder andTarget must exercise rights of control in good faith and without the oppression of a minority.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.5.9
The
Governing Body of aTarget must act in the interests of theTarget as a whole. The shareholders' interests, taken as a whole, must be considered when aGoverning Body or itsDirectors are giving advice to shareholders.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.5.10
Directors of aBidder and theTarget must, in advising their shareholders, act only in their capacity asDirectors and not have regard to their personal or family shareholdings or to their personal relationships with theBidder orTarget .Directors of theTarget must give careful consideration before they enter into any commitment with aBidder (or anyone else) which would restrict their freedom to advise their shareholders in the future.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.5.11
Where a
Person (orPersons acting in concert) acquires control of aReporting Entity , a generalBid to all other shareholders is normally required, and a similar obligation may arise if control is consolidated. Where an acquisition is contemplated as a result of which aPerson may incur such an obligation, he must, before making the acquisition, ensure that he can and will be able to continue to be able to implement such aBid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.5.12 TKO 1.5.12
All
Persons concerned with aTakeover which is subject to the Takeover Rules must co-operate to the fullest extent with theDFSA and provide all relevant information.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 1.5.12 Guidance
1. TheseTakeover Principles are prescribed in accordance with Article 53 of the Markets Law 2012. The principles have the full force and effect ofRules and are therefore binding and enforceable. They are essentially statements of good standards of commercial behaviour. They apply to all transactions with which the Takeover Rules are concerned. They are, however, expressed in broad general terms and the Markets Law 2012 and theseRules do not define the precise extent of, or the limitations on, their application.2. The remainingRules in this Module effectively expand upon theseTakeover Principles , and provide examples of their application and make provision governing specific aspects ofTakeover procedure. Although most of theRules are expressed in more detailed language than theTakeover Principles , they are not framed in technical language and, like theTakeover Principles , are to be interpreted to achieve their underlying purpose. Therefore, their spirit must be observed as well as their letter and theDFSA may waive or modify the application of a rule if it considers that, in the particular circumstances of the case, it would operate unduly harshly or in an unnecessarily restrictive or burdensome, or otherwise inappropriate, manner. See Article 9 of the Markets Law 2012 and TKO Chapter 16 of theseRules .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]TKO 2 TKO 2 The Approach, Announcements and Advice
TKO 2.1 TKO 2.1 The approach
TKO 2.1.1
A
Person must, in making aBid or in making an approach with a view to aBid being made, make suchBid or approach in the first instance to theGoverning Body of theTarget or to its duly authorised advisers.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.1.2
If a
Bid or approach is made by aPerson on behalf of an ultimateBidder or potentialBidder , thePerson must disclose the identity of the ultimateBidder or potentialBidder at the outset of making theBid or approach.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.1.3
A
Bidder must, upon receiving a request from theGoverning Body of theTarget , provide information reasonably required to verify that theBidder is, or will be, in a position to implement theBid in full.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.2 TKO 2.2 Secrecy before announcements
TKO 2.2.1 TKO 2.2.1
Before an announcement by which the relevant information is made publicly available, a
Person privy to confidential information, which constitutesMaterial Information or otherwise, concerning aBid or contemplatedBid must treat that information as secret and may only pass it to anotherPerson if:(a) it is necessary to do so; and(b) thatPerson is made aware of the need for secrecy.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.2.1 Guidance
Other legislation similarly applies to use and disclosure of confidential information.
Persons associated with potentialTakeover transactions should, for instance, be well aware of restrictions and prohibitions under the Markets Law 2012 including Article 58 relating to insider dealing.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]TKO 2.2.2 TKO 2.2.2
A
Person concerned in aBid or contemplatedBid must take reasonable steps so as to minimise the chances of an accidental leak of information.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.2.2 Guidance
A
Bidder orTarget should maintain appropriate systems and controls to ensure the maintenance of confidentiality. This may include, for example, maintaining a register of information disclosed and to whom.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.3 TKO 2.3 Announcement of a possible bid
TKO 2.3 Guidance
An announcement of a possible
Bid is intended to preserve the integrity of trading in aReporting Entity's Shares on theAuthorised Market Institution , or any other exchange upon which that entity'sShares are traded, preceding or during negotiations which may lead to an announcement of a firm intention to make aBid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.3.1 TKO 2.3.1
A potential
Bidder must make an announcement of a possibleBid when, before approaching a potentialTarget :(a) either:(i) the potentialTarget is the subject of rumour and speculation; or(ii) there is an abnormal movement in the price of the potentialTarget's Shares ; and(b) there are reasonable grounds to conclude that it is the potentialBidder's actions (whether through inadequate security or otherwise) which have led to the situation.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.3.1 Guidance
1. As a consequence of this rule, the potentialBidder should keep a close watch on the potentialTarget's Share price for any signs of untoward movement.2. TheDFSA should be consulted at the latest when a potentialTarget becomes the subject of any rumour and speculation or where there is a material or abrupt movement in its share price after the time when aBid is first actively considered.3. Additional information may be the subject of a later supplementary announcement.4. A potentialBidder should consult with theDFSA at the earliest opportunity where the requirement to make an announcement pursuant to TKO Rule 2.3.1 may be considered inappropriate. TheDFSA may waive or modify the application of the rule if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of theseRules .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.3.2 TKO 2.3.2
A
Target must make an announcement of a possibleBid when, following an approach to it which may or may not lead to aBid :(a) theTarget is the subject of rumour and speculation; or(b) there is an abnormal movement in the price of theTarget's Shares ; or(c) negotiations or discussions are about to be extended to include more than a very restricted number ofPersons (outside those in the entities concerned who need to know and their immediate advisers).
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.3.2 Guidance
1. As a consequence of thisRule , theTarget should keep a close watch on itsShare price for any signs of untoward movement.2. TheDFSA should be consulted at the latest when theTarget becomes the subject of any rumour and speculation or where there is a price movement of 10% or more above the lowestShare price since the time of the approach. An abrupt price rise of a smaller percentage could also be considered abnormal. In considering whether a price movement is abnormal, theDFSA may look at a range of factors, including the general market, publicly available information, and the relevant time period.3. Additional information may be the subject of a later supplementary announcement.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.3.3 TKO 2.3.3
An announcement of a possible
Bid must:(a) name the potentialBidder ; and(b) state that the shareholders concerned should exercise caution in dealing in theirShares .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.3.3 Guidance
The announcement of a possible
Bid may be brief and couched in general terms and should, in the normal course, state that talks are taking place or that a potentialBidder is considering making aBid or that an announcement is pending which could have a material effect on the price of theShares .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.4 TKO 2.4 Announcement of a firm intention to make a bid
TKO 2.4.1 TKO 2.4.1
A
Bidder must make an announcement of a firm intention to make aBid immediately upon:(a) giving any notification to theTarget as described in TKO Rule 2.4.2; or(b) an acquisition ofShares which gives rise to an obligation to make aMandatory Bid under TKO Chapter 4 of theseRules ;whichever is the earlier.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.4.1 Guidance
The respective obligations of the
Target and of theBidder to make announcements under theseRules may be satisfied by the making of a joint announcement.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.4.2
A
Target must make an announcement when theGoverning Body of theTarget has been notified of a firm intention to make aBid from a serious source, irrespective of the attitude of theGoverning Body to theBid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.4.3 TKO 2.4.3
An announcement by the
Bidder of a firm intention to make aBid must contain:(a) the identity of theBidder ;(b) the principal terms of theBid ;(c) details of any existing holding ofShares in theTarget :(i) which theBidder owns or over which it has control;(ii) which is owned or controlled by anyPerson acting in concert with theBidder or in respect of which theBidder has received an irrevocable commitment to accept theBid ;(iii) in respect of which theBidder holds an option to purchase; and(iv) in respect of which anyPerson acting in concert with theBidder holds an option to purchase;(d) all material conditions (including normal conditions relating to acceptances, listing and increase of capital) to which theBid or the posting of it is to be subject; and(e) details of any arrangement which exists with anyBidder , with theTarget or with anyPerson acting in concert with theBidder or with theTarget in relation to relevantShares , whether or not any dealings have taken place.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.4.3 Guidance
The
DFSA may waive or modify the application of TKO Rule 2.4.3 if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of theseRules .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.4.4
A
Bidder must not:(a) make an announcement of a firm intention to make aBid ; or(b) take any action which would give rise to the requirement to make such an announcement;unless the
Bidder and its financial adviser have proper grounds for believing that theBidder is and will continue to be able to implement theBid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.4.5 TKO 2.4.5
The announcement of a firm intention to make a
Bid containing a whole or partial cash consideration must include confirmation by the financial adviser or by another appropriate third party that resources are available to theBidder sufficient to satisfy full acceptance of theBid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.4.5 Guidance
The
DFSA takes the view that thePerson confirming availability of resources will not be expected to produce the cash itself if, in giving the confirmation, it acted responsibly and took all reasonable steps to assure itself that the cash was available.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.4.6 TKO 2.4.6
When there has been an announcement of a firm intention to make a
Bid , theBidder must proceed with theBid unless theBid is subject to the prior fulfilment of a previously disclosed specific condition and that condition has not been fulfilled.Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM40/2007 (Made 8th February 2007). [VER2/02-07]TKO 2.4.6 Guidance
The
DFSA may waive or modify the application of TKO Rule 2.4.6 if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of theseRules . See also TKO Rule 11.1.1 and the Guidance thereto.Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM40/2007 (Made 8th February 2007). [VER2/02-07]TKO 2.5 TKO 2.5 Announcements in other circumstances
TKO 2.5.1
Where an acquisition of
Target Shares by aBidder or anyPerson acting in concert with it gives rise to obligations under:(a) TKO Rule 3.1.1 (acquisitions before aBid Period ), or(c) TKO Rule 5.2.1 (requirement for aBid in cash),an appropriate announcement must be made immediately after such an acquisition.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.5.2
Whenever practicable, the announcement must also state the number of
Shares acquired and the consideration paid.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.6 TKO 2.6 Mode of publication of an announcement
TKO 2.6.1 TKO 2.6.1
An announcement under TKO Section 2.3, TKO Section 2.4 or TKO Section 2.5 must be published in the same manner as a market disclosure required under MKT Rule 4.7.1.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]TKO 2.6.1 Guidance
An announcement should not be delayed while full information is being obtained. Additional information may be the subject of a later supplementary announcement.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM63/2008 (Made 4th January 2009). [VER4/01-09]
[Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]TKO 2.7 TKO 2.7 Governing bodies to obtain independent advice
TKO 2.7 Guidance
1. TKO Rule 2.7.1 and TKO Rule 2.7.2 require theTarget's adviser to have a sufficient degree of independence from theTarget to ensure the advice given is properly objective. In certain circumstances it may not be appropriate for aPerson who has had a recent advisory relationship with aBidder to give advice to aTarget . Additionally, theDFSA would consider aPerson who has a significant interest in or financial connection with either aBidder or theTarget of such a kind as to create a conflict of interest.2. The requirement for competent independent advice is of particular importance where theBid is a management buyout or similar transaction or is being made by the existing controlling shareholder or group of shareholders. In any such cases, the independence of the adviser must be beyond question.3. TheDFSA should be consulted if there is any potential of a contravention of these Rules TKO 2.7.1 and TKO 2.7.2. TheDFSA may waive or modify the application of theRules if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of theseRules .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.7.1 TKO 2.7.1
The
Governing Body of aBidder must:(a) obtain competent independent advice on anyBid when theBid being made is a reverseTakeover or when theDirectors are faced with a conflict of interest; and(b) make known the substance of such advice to its shareholders early enough to enable them to make a timely and informed decision on the merits of theBid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.7.1 Guidance
When the
Governing Body of aBidder is required to obtain competent independent advice, it should do so before announcing itsBid or any revisedBid . Such advice should be as to whether or not the making of theBid is in the interests of theBidder's shareholders. Shareholders should have sufficient time to consider advice given to them prior to any general meeting held to implement the proposedBid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.7.2 TKO 2.7.2
The
Governing Body of aTarget must:(a) obtain competent independent advice on anyBid including as to how it affects all shareholders; and(b) make known the substance of such advice to its shareholders early enough to enable them to make a timely and informed decision on the merits of theBid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 2.7.2 Guidance
In obtaining advice as to how a
Bid affects all shareholders, consideration should specifically be given to the effect on minority shareholders or classes of shareholders, where applicable. It is expected that the substance of any such advice will be summarised in theTarget Circular . See Sections TKO 8.1 and TKO 8.2 of theRules .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 3 TKO 3 Restricted Dealings Before and During an Offer Period
TKO 3.1 TKO 3.1 Acquisitions before a bid period
TKO 3.1.1
Subject to Rules TKO 4.3.1 and TKO 5.2.1, when a
Bidder or anyPerson acting in concert with it has acquiredShares in theTarget :(a) within the six month period prior to the commencement of theBid Period ; or(b) during the period, if any, between the commencement of theBid Period and an announcement made by theBidder in accordance with TKO Section 2.4;the
Bid to the shareholders of the same class must not be on less favourable terms.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 3.2 TKO 3.2 Acquisitions during a bid period
TKO 3.2.1
If, after the commencement of the
Bid Period and before theBid closes for acceptance, aBidder or anyPerson acting in concert with it acquires relevantShares in theTarget at above theBid price (being the then currentBid price), theBidder must revise itsBid to not less than the highest price paid for theShares so acquired.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 3.2.2 TKO 3.2.2
Immediately after the acquisition, the
Bidder must make an announcement that a revisedBid will be made in accordance with TKO Rule 3.2.1.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 3.2.2 Guidance
In relation to TKO Rule 3.2.2, see also TKO Section 11.4 of these
Rules .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 3.2.3
The announcement must also state the number of
Shares acquired and the price paid.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 3.3 TKO 3.3 Restrictions on the sale of shares during a bid period
TKO 3.3.1 TKO 3.3.1
During a
Bid Period , theBidder andPersons acting in concert with it must not sell anySecurities in theTarget .Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM40/2007 (Made 8th February 2007). [VER2/02-07]TKO 3.3.1 Guidance
1. As a matter of course, theDFSA will not waive the requirements under TKO Rule 3.3.1 for sales where aMandatory Bid under TKO Chapter 4 is being made.2. Where theDFSA grants a waiver from this requirement, it may:a. require a period of prior public notice that sales might be made; andb. impose a restriction that after notice has been given that sales may be made, neither theBidder norPersons acting in concert with it may make further purchases.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 3.4 TKO 3.4 Disclosure of dealings during a bid period
TKO 3.4.1 TKO 3.4.1
Dealings in relevant
Securities during aBid Period by theBidder or theTarget , and by anyPerson acting in concert, for:(a) their or his own account; or(b) the account of clients;must be disclosed forthwith by the
Person concerned:(c) to theDFSA ; and(d) in the same manner as a market disclosure required under Rule 4.7.1 of the Markets Rules.Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]TKO 3.4.1 Guidance
Where two or more persons act pursuant to an agreement or understanding, whether formal or informal, to acquire or control relevant
Securities , theDFSA will treat them as a single person for the purpose of thisRule .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 3.4.2
Disclosure of dealings in relevant
Securities of aBidder is only required following:(a) an announcement of aSecurities Exchange Bid ; or(b) an earlier commencement of aBid Period if it has not been announced that anyBid is likely to be solely in cash.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 3.4.3
A disclosure pursuant to TKO Rule 3.4.1 must, at least:
(a) provide the total number of the relevantSecurities purchased or sold;(b) provide the total number of the respective dealings for thePerson's own account and for the account of clients;(c) detail the prices paid or received;(d) identify thePerson dealing.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 3.4.4 TKO 3.4.4
For the purpose of the
Rules in this Section, "relevantSecurities " include:(a)Securities of theTarget which are subject to aBid or which carry voting rights;(b) equityShare capital of theBidder and theTarget ;(c)Securities of aBidder which carry substantially the same rights as any to be issued as consideration for aBid ;(d)Securities ofBidder and theTarget carrying conversion or subscription rights into any of the above;(e) options in respect of any of the foregoing and derivatives materially referenced to any of the foregoing.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 3.4.4 Guidance
In the case of investment accounts managed on a discretionary basis, relevant
Securities orShares so managed will be treated, for the purpose of thisRule , as controlled by that manager and not by thePerson on whose behalf the relevantSecurities orShares are managed.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 4 TKO 4 Mandatory Bids
TKO 4.1 TKO 4.1 Requirement for a mandatory bid
TKO 4.1.1 TKO 4.1.1
Subject to TKO Rule 4.1.2, when:
(a) anyPerson acquires, whether by a series of transactions over a period of time or not,Shares which carry 30% or more of the voting rights of aReporting Entity ;(b) two or morePersons are acting in concert, and they collectively holdShares which carry less than 30% of the voting rights of aReporting Entity , and any one or more of them acquiresShares and such acquisition has the effect of increasing to 30% or more their collective holding ofShares carrying voting rights of theReporting Entity ;(c) anyPerson holds not less than 30% ofShares carrying voting rights of aReporting Entity and suchPerson acquires additionalShares and such acquisition has the effect of increasing that person's holding ofShares carrying voting rights by more than 3% from the lowest percentage holding of thatPerson in the 12 month period ending on and inclusive of the date of the relevant acquisition; or(d) two or morePersons are acting in concert, and they collectively hold not less than 30% ofShares carrying voting rights of aReporting Entity , and any one or more of them acquires additionalShares and such acquisition has the effect of increasing their collective holding ofShares carrying voting rights by more than 3% from the lowest percentage holding of suchPersons in the 12 month period ending on and inclusive of the date of the relevant acquisition;such
Person must extendBids under theseRules to the holders of any class of equityShare capital, whether voting or non-voting, and also to the holders of any class of voting non-equityShare capital of which suchPerson , orPersons acting in concert with him, holdShares .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 4.1.1 Guidance
1. Under Article 9 of the Markets Law 2012 theDFSA may waive or modify the application of the Markets Law 2012 or of theRules .2. Where an obligation to make aMandatory Bid arises as a consequence ofPersons acting in concert, theDFSA should be consulted at the earliest opportunity to determine, where appropriate, whichPerson orPersons should mount theBid and consequently whether any waiver or modification from thisRule is appropriate. TheDFSA may, for example, require theBid to be made by thePerson who acquired the shares which triggered the obligation under TKO Rule 4.1.1 to make theMandatory Bid .3. A definition of "acting in concert" is provided in TKO Rule 1.4.1. As a consequence of that definition, TKO Rule 4.1.1 may require aBid to be made even when no singlePerson in a group acting in concert holds 30% or more of the voting rights.4. Where aPerson acquires shares independently from other shareholders, and subsequently groups together with other shareholders to co-operate or to consolidate control of aReporting Entity , and their existing shareholdings amount to 30% or more of the voting rights in theReporting Entity , theDFSA would not normally require aBid to be made under TKO Rule 4.1.1. However, having once joined together, TKO Rule 4.1.1 may apply. For example, aMandatory Bid may be required when a member of the group acquires further shares carrying voting rights such that the total of the groups holdings reach 30% or more.5. TheDFSA will entertain an application for waiver or modification relating to the amount of permissible creep under TKO Rule 4.1.1(c) or (d) only in exceptional circumstances. Without in any way limiting theDFSA's discretion, such a circumstance may include where there is a dilution of voting rights by the issue of new shares or otherwise and it is appropriate to net off the dilution against acquisitions.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]TKO 4.1.2 TKO 4.1.2
TKO Rule 4.1.1 does not apply in relation to an acquisition of
Shares of aReporting Entity which is the result of:(a) exercise of a right conferred by law of a minority shareholder to have his shareholding compulsorily acquired by aBidder ; or(b) exercise of a right conferred by law of aBidder to compulsorily acquire the shareholding of a minority shareholder.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 4.1.2 Guidance
1. An example of a right described in TKO Rule 4.1.2(a) appears in Article 100 of the Companies Law.2. Provisions described in TKO Rule 4.1.2(b) are commonly referred to as "squeeze-out" or "mopping-up" provisions. See for example Article 98 of the Companies Law.Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] from DFSA RMI276/2020 (Made 26th February 2020). [VER08/04-20]TKO 4.1.3 TKO 4.1.3
Bids for different classes of equityShare capital must be fair and appropriate, having regard to current circumstances, and theDFSA must be consulted in advance in such cases.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 4.1.3 Guidance
1. TheDFSA may waive or modify the application of theRules if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of theseRules .2. When the issue of newShares as consideration for an acquisition or a cash subscription would otherwise result in an obligation to make aMandatory Bid under theRules in this TKO Chapter 4, theDFSA will normally dispense with such obligation if there is a waiver thereof by a majority of independent votes at a meeting of the shareholders. The requirement for aMandatory Bid will also be dispensed with, provided there has been a majority of independent votes at a properly constituted meeting of shareholders, in cases involving the underwriting of an issue ofShares . TheDFSA may in its discretion grant a dispensation in cases where an underwriter incurs an obligation under theseRules unexpectedly, for example as a result of an inability to obtain sub-underwriters for all or part of his liability. Where a waiver or modification is granted as per thisGuidance , consideration should also be given as to whether the definition of "voting rights" in TKO Section 1.4 will require consequential modification.3. Notwithstanding the fact that, at a general meeting of theReporting Entity , the issue of newShares is made conditional upon the prior approval of a majority of votes of shareholders independent of the transaction:a. theDFSA will not normally dispense with an obligation under this Section if thePerson to whom the newShares are to be issued or anyPersons acting in concert with him have acquired relevantShares in theTarget in the 12 months prior to the posting of theBid Document but subsequent to negotiations, discussions or the reaching of understandings or agreements with theDirectors of theTarget in relation to the proposed issue of newShares ;b. a waiver by independent votes shall be invalidated if any acquisitions are made in the period between the posting of theBid Document to the shareholders and the meeting.4. TheDFSA may dispense with the requirement of aMandatory Bid where the approval of independent votes to the transfer of existingShares from one holder to another is obtained.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 4.2 TKO 4.2 Conditions and consents
TKO 4.2.1
A
Mandatory Bid made under theseRules must be conditional only upon theBidder having received acceptances in respect ofShares which, together withShares acquired or agreed to be acquired before or during theBid , will result in theBidder and anyPerson acting in concert with it holdingShares carrying more than 50% of the voting rights.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 4.2.2 TKO 4.2.2
No acquisition of
Shares which would give rise to a requirement for aMandatory Bid under theseRules may be made if the making or implementation of suchBid would or might be dependent on the passing of a resolution at any meeting of shareholders of theBidder or upon any other conditions, consents or arrangements.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 4.2.2 Guidance
The
DFSA may waive or modify the application of TKO Rule 4.2.1 or TKO Rule 4.2.2 if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of theseRules .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 4.3 TKO 4.3 Consideration to be offered
TKO 4.3.1 TKO 4.3.1
Mandatory Bids made under theseRules must, in respect of each class ofShares involved, be in cash or be accompanied by a cash alternative at not less than the highest price paid by theBidder or anyPerson acting in concert with it forShares of that class during theBid Period and within the preceding six months.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 4.3.1 Guidance
1. If theBidder considers that the highest price should not apply in a particular case, theBidder should consult theDFSA . TheDFSA may waive or modify the application of TKO Rule 4.3.1 if it is satisfied that circumstances are appropriate to provide a dispensation from thisRule . See TKO Chapter 16 of theseRules . Factors that theDFSA may take into account include the size or timing of the relevant acquisitions, the attitude of theGoverning Board of theTarget , whetherShares had been purchased at high prices fromDirectors or otherPersons closely connected with theBidder orTarget , and the number ofShares purchased in the preceding six months.2. TheDFSA should be consulted where there is more than one class ofShares involved.3. Also note related provisions, TKO Rule 3.1.1 (acquisitions before aBid Period ) and TKO Rule 5.2.1 (requirement for aBid in cash).
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 4.3.2 TKO 4.3.2
The cash
Bid or any cash alternative must remain open after theBid has become or is declared unconditional as to acceptances for not less than 14 days after the date on which it would otherwise have expired.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 4.3.2 Guidance
See also TKO Rule 11.2.2.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 4.4 TKO 4.4 Obligations of directors selling shares
TKO 4.4.1
When a
Director of aReporting Entity sellsShares owned or controlled by him in thatReporting Entity to an identifiable purchaser as a result of which the purchaser is required to make aBid under theRules in this Chapter, suchDirector must stipulate as a condition of the sale that the purchaser undertakes to fulfil his obligations under theRules .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 4.4.2
In addition, such
Director must not resign from theGoverning Body until the first closing date of theBid or the date upon which theBid becomes or is declared unconditional, whichever is the later.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 4.5 TKO 4.5 Restrictions on exercise of control by a bidder
TKO 4.5.1
No nominee of a
Bidder orPersons acting in concert with it may be appointed to theGoverning Body of theTarget , nor may aBidder andPersons acting in concert with it exercise the votes attaching to anyShares held in theTarget , until theBid Document has been posted.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 5 TKO 5 The Terms of a Voluntary Bid
TKO 5.1 TKO 5.1 The acceptance condition
TKO 5.1.1
It must be the condition of any
Bid for voting equityShare capital which, if accepted in full, would result in theBidder holdingShares carrying over 50% of the voting rights of theTarget , that theBid will not become or be declared unconditional as to acceptances unless theBidder has acquired or agreed to acquire (either pursuant to theBid or otherwise)Shares carrying over 50% of the voting rights attributable to:(a) the equityShare capital alone; and(b) the equityShare capital and the non-equityShare capital combined.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 5.2 TKO 5.2 Requirement for a bid in cash
TKO 5.2.1 TKO 5.2.1
Where the
Shares of any class underBid in theTarget acquired for cash by aBidder or anyPerson acting in concert with it during theBid Period , or within six months prior to its commencement, carry 10% or more of the voting rights currently exercisable at a class meeting of that class, theBid for that class must be in cash or accompanied by a cash alternative at not less than the highest price paid by theBidder or anyPerson acting in concert with it forShares of that class during theBid Period or within six months prior to its commencement.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 5.2.1 Guidance
1. TheDFSA may waive or modify the application of TKO Rule 5.2.1 if it is satisfied that circumstances are appropriate. For example, if theBidder considers that the highest price ought not to apply in a particular case, it must consult theDFSA , which may grant a waiver or modification to reflect an adjusted price. See TKO Chapter 16 of theseRules .2. Also note related provisions TKO Rule 3.1.1 (acquisitions before aBid Period ) and TKO Rule 4.3.1 (consideration to be offered in aMandatory Bid ).
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 5.3 TKO 5.3 Subjective conditions
TKO 5.3.1 TKO 5.3.1
Subject to prior consent of the
DFSA , aBid shall not be subject to conditions which depend solely on subjective judgements by theDirectors of theBidder or the fulfilment of which is in their hands.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 5.3.1 Guidance
1. TheDFSA may be prepared to accept an element of subjectivity in certain special circumstances where it is not practicable to specify all the factors on which satisfaction of a particular condition may depend. This may especially arise in cases involving official authorisations, the granting of which may be subject to an additional material obligation of theBidder . Consent would also normally be granted where an announcement for aBid is to be expressed as being conditional on statements or estimates being appropriately verified.2. ABidder should not invoke any condition, other than the acceptance condition, so as to cause theBid to lapse unless the circumstances which give rise to the right to invoke the condition are of material significance to theBidder in the context of theBid .3. Conditions that depend solely on a force majeure are not prohibited by thisRule .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 6 TKO 6 Provisions Applicable to All Bids
TKO 6.1 TKO 6.1 Where there is more than one class of shares
TKO 6.1.1 TKO 6.1.1
Where a
Target has more than one class ofShares as its capital, theBidder must:(a) make a fair and appropriateBid , having regard to current circumstances, for each class whether such capital carries voting rights or not;(b) consult theDFSA in advance of such aBid being made; and(c) ensure that aBid for non-votingShares is not conditional on any particular level of acceptances in respect of that class unless theBid for the votingShares is also conditional on the success of theBid for the non-votingShares .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 6.1.1 Guidance
A fair and appropriate
Bid need not necessarily be an identicalBid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 6.1.2
Classes of non-equity
Share capital need not be the subject of aBid , except in the circumstances referred to in TKO Rule 4.1.1.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 6.1.3
Where a
Bid is made for more than one class ofShares , separateBids must be made for each class.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 6.2 TKO 6.2 Appropriate bid for options, convertibles and rights
TKO 6.2.1
When a
Bid is made forShares and theTarget has:(a) issued options conferring a right to acquireShares ;(b) issuedConvertibles conferring a right to convert aSecurity intoShares ; or(c) issued subscription rights conferring a right to subscribe forShares ;which remain outstanding, the
Bidder must make aBid or proposal to the holders of each such category of options,Convertibles or subscription rights.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 6.2.2
A
Bid or proposal under TKO Rule 6.2.1 must, in relation to the holders in each such category:(a) be fair and appropriate;(b) provide equal treatment; and(c) ensure that their interests are safeguarded.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 6.3 TKO 6.3 Special deals with favourable conditions
TKO 6.3.1 TKO 6.3.1
A
Bidder orPersons acting in concert with it must not make any arrangements with shareholders and must not deal or enter into arrangements to deal inShares of theTarget , or enter into arrangements which involve acceptance of aBid , either during aBid or when one is reasonably in contemplation, if there are favourable conditions attached which are not being extended to all shareholders.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 6.3.1 Guidance
The
DFSA may waive or modify the application of TKO Rule 6.3.1 if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of theseRules .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 6.4 TKO 6.4 Announcement of acceptance levels
TKO 6.4.1
By 9:00am (Dubai time) at the latest on the business day following the day on which a
Bid is due to expire, or becomes or is declared unconditional as to acceptances, or is extended, theBidder must make an appropriate announcement including an announcement made in the same manner as a market disclosure required under Rule 4.7.1 of the Markets Rules.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]TKO 6.4.2 TKO 6.4.2
The announcement must state the total numbers of
Shares and rights overShares (as nearly as practicable);(a) for which acceptances of theBid have been received;(b) held before theBid Period ; and(c) acquired or agreed to be acquired during theBid Period ;and must specify the percentages of the relevant classes of
Shares represented by these numbers.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 6.4.2 Guidance
1. See also TKO Rule 11.2.2.2. If, during aBid , any statements are made by aBidder or its advisers about the level of acceptances of theBid or the number or percentages of shareholders who have accepted theBid , an immediate announcement must be made in conformity with theseRules .3. If aBidder fails within the time limit to comply with the requirements in this Section, theDFSA orAuthorised Market Institution (as appropriate) may consider a temporary suspension of listing of theTarget's Shares and, where appropriate, theBidder's Shares until the relevant information is given.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 6.5 TKO 6.5 Use of proxies and authorities in relation to acceptances
TKO 6.5.1
A
Bidder must not require the shareholders of theTarget , as a term of his acceptance of aBid , to appoint a proxy to vote in respect of thoseShares or to appoint a particularPerson to exercise any other rights or take any other action in relation to thoseShares unless the appointment is on the following terms, which must be set out in theBid Document :(a) the proxy may not vote, the rights may not be exercised and no other action may be taken unless theBid is wholly unconditional or, in the case of voting by the proxy, theBid will become wholly unconditional or lapse immediately upon the outcome of the resolution in question;(b) where relevant, the votes are to be cast as far as possible to satisfy any outstanding condition of theBid ;(c) the appointment ceases to be valid if the acceptance is withdrawn; and(d) the appointment applies only toShares in respect of which there is an acceptance of theBid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 7 TKO 7 Conduct During a Bid
TKO 7.1 TKO 7.1 Standards and responsibilities for care and accuracy
TKO 7.1.1 TKO 7.1.1
A
Bidder and theTarget , respectively, must ensure that each document or advertisement issued, or statement made, by them or on their behalf during the course of aBid :(a) satisfies the highest standards of accuracy;(b) adequately and fairly presents any information contained in it; and(c) will not mislead shareholders and the market or create uncertainty.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 7.1.1 Guidance
1. ThisRule applies whether the document, advertisement or information is issued directly by theBidder orTarget or by an adviser on their behalf.2. Campaigns in which shareholders are contacted by telephone should be conducted only by staff of the financial advisers who are fully conversant with the requirements of and their responsibilities under theRules . Only previously published information which remains accurate, and is not misleading at the time it is quoted, should be used in telephone campaigns. Shareholders should not be put under pressure and should be encouraged to consult their professional advisers.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 7.1.2
Each document issued to shareholders or advertisements published in connection with a
Bid , in which there is a material expression of opinion must state that theDirectors of theBidder and/or, where appropriate, theTarget , accept responsibility for the information contained in the document or advertisement and that to the best of their knowledge and belief (having taken all reasonable care to ensure that such is the case) the information contained in the document or advertisement is in accordance with the facts and, where appropriate, that it does not omit anything likely to affect the import of such information.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 7.1.3
If it is proposed that any
Director shall be excluded from such a statement referred to in TKO Rule 7.1.2, the omission and the reasons for it must be stated in the document or advertisement.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 7.2 TKO 7.2 Distribution of documents and announcements
TKO 7.2.1 TKO 7.2.1
Copies of all relevant documents and announcements bearing on a
Bid , and of advertisements and any material to be released to the media, must at the time of release be filed with theDFSA .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 7.2.1 Guidance
The time of filing of
Bid Documents andTarget Circulars with theDFSA is addressed in TKO Section 11.1.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 7.2.2
Copies of all relevant documents and announcements when issued or made must also be made available at the same time to the advisers to all other parties to the
Bid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 7.3 TKO 7.3 Equality of information
TKO 7.3.1
Subject to TKO Rule 7.3.2, information about entities involved in a
Bid must be made equally available to all shareholders as nearly as possible at the same time and in the same manner.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 7.3.2
TKO Rule 7.3.1 does not apply to:
(a) the furnishing of information in confidence by aTarget to a bona fide potentialBidder or vice versa; or(b) the issue of circulars to their own investment clients by brokers or advisers to any party to the transaction.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 7.3.3
Any information, including particulars of shareholders, given to one
Bidder or potentialBidder , must, on request, be furnished equally and as promptly to anotherBidder or bona fide potentialBidder , even if that otherBidder is less welcome.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 7.3.4
If the
Bid or potentialBid is for a management buy-out or similar transaction, theBidder or potentialBidder must, on request, forthwith furnish the independentDirectors of theTarget or its advisers with all information which has been furnished by theBidder or potentialBidder to external providers or potential providers of finance (whether equity or debt) for the buy-out.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 7.4 TKO 7.4 Restrictions on frustrating action
TKO 7.4.1
During the course of a
Bid , or even before the date of theBid if theGoverning Body of theTarget has reason to believe that a bona fideBid might be imminent, theGoverning Body must not, except in pursuance of a contract entered into earlier, without the approval of the shareholders to the relevant proposal given in general meeting:(a) issue any authorised but unissuedShares ;(b) issue or grant options in respect of any unissuedShares ;(c) create or issue, or permit the creation or issue of, anySecurities carrying rights of conversion into or subscription forShares ;(d) sell, dispose of or acquire, or agree to sell, dispose of or acquire, assets of a material amount;(e) enter into contracts otherwise than in the ordinary course of business; or(f) pay any dividend which is abnormal as to timing and amount.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 7.4.2
The notice convening the general meeting of shareholders must include information about the
Bid or contemplatedBid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 7.4.3
Where it is considered that an obligation or other special circumstance already exists, although a formal contract has not been entered into, the
DFSA must be consulted and its consent obtained to proceed without a meeting of shareholders.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 8 TKO 8 Documents Issued by Governing Bodies
TKO 8.1 TKO 8.1 The general obligation as to information
TKO 8.1.1
The
Governing Bodies of theBidder andTarget must give sufficient information and advice to the shareholders of theTarget to enable them to reach a properly informed decision as to the merits of aBid . Such information must be made available to such shareholders early enough to enable them to make a timely and informed decision.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 8.1.2 TKO 8.1.2
The
Governing Bodies ofBidder andTarget must make timely disclosure of all statements, notices, declarations and other documents such as theBid Document and theTarget Circular in the same manner as a market disclosure under Rule 4.7.1 of the Markets Rules.[Added] DFSA RM40/2007 (Made 8th February 2007). [VER2/02-07]
[Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]TKO 8.1.2 Guidance
This provision applies Rule 4.7.1 of the Markets Rules in respect of the
Bidder andTarget to a takeover regardless of whether they areReporting Entities . For the avoidance of doubt, specific obligations to make disclosure are also contained in Rules TKO 2.6.1, and TKO 3.4.1.[Added] DFSA RM40/2007 (Made 8th February 2007). [VER2/02-07]
[Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]TKO 8.2 TKO 8.2 Bid document and target circular disclosures
TKO 8.2.1 TKO 8.2.1
In its
Bid Document , theBidder must disclose the information specified in TKO App1, together with any other relevant information to enable theTarget's shareholders to reach a properly informed decision.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 8.2.1 Guidance
See also TKO Rule 11.1.1.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 8.2.2 TKO 8.2.2
The
Governing Body of theTarget must circulate its views on theBid , including any alternativeBids , to its shareholders in aTarget Circular .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 8.2.2 Guidance
Nothing in these
Rules precludes aBidder and aTarget issuing a joint document under which they comply with their respective obligations.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 8.2.3 TKO 8.2.3
In its initial
Target Circular , theGoverning Body of theTarget must disclose the information specified in TKO App2 (whether recommending acceptance or rejection of theBid ), together with any other information it considers to be relevant to enable its shareholders to reach a properly informed decision on theBid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 8.2.3 Guidance
See also TKO Rule 11.1.2.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 8.3 TKO 8.3 Documents subsequently sent to shareholders
TKO 8.3.1
Documents subsequently sent to shareholders of the
Target by either theBidder orTarget during theBid Period must contain the information specified in TKO App3.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 8.4 TKO 8.4 Availability of documents for inspection
TKO 8.4.1
Where a
Bidder orTarget :(a) has prepared or possesses any document prescribed in TKO Rule 8.4.2; or(b) has referred to or relied upon any document prescribed in TKO Rule 8.4.2 in itsBid Document orTarget Circular ;the
Bidder orTarget respectively must make any such document available for inspection from the time theBid Document orTarget Circular , as appropriate, is published until the end of theBid Period . TheBid Document orTarget Circular must state which documents are so available and the place in theDIFC where inspection can be made.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 8.4.2 TKO 8.4.2
The following documents are prescribed for the purposes of TKO Rule 8.4.1:
(a) Where a profit forecast has been made:(i) the reports of the auditors or reporting accountants (TKO Rule 9.4.1); and(ii) the letters giving the consents of the auditors or reporting accountants and appropriate external valuers to the issue of the relevant document, with the report in the form and context in which it is included or, if appropriate, to the continued use of the report in a subsequent document (TKO Rule 9.4.4 and TKO Rule 9.6.1).(b) Where an asset valuation has been made:(i) the valuation certificate and associated report or a schedule containing details of the aggregate valuation (TKO Section 10.2); and(ii) a letter stating that the valuer has given and not withdrawn his consent to the publication of his valuation certificate in the form and context in which it is included in the relevant document.(c) Any document evidencing an irrevocable commitment to accept aBid or any arrangement, undertaking or agreement relating to the commitment to accept aBid or to the circumstances in which theBidder may or may not invoke or seek to invoke a condition to itsBid .(d) The memorandum and articles of association of theTarget , and where there is aSecurities Exchange Bid , also of theBidder .(e) The annual financial statements of theTarget , and, where there is aSecurities Exchange Bid , also theBidder for the last three completed financial years in respect of which audited annual financial statements have been issued.(f) Any other document materially relied upon in theBid Document orTarget Circular .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 8.4.2 Guidance
The
DFSA may waive or modify the application of certain provisions of this TKO Section 8.4 if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of theseRules .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 9 TKO 9 Profit Forecasts
TKO 9.1 TKO 9.1 References to profit forecasts
TKO 9.1.1
A reference in this TKO Section 9 to:
(a) a "profit forecast" includes a forecast of loss; and(b) a "profit" includes a loss.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 9.2 TKO 9.2 Standards of care
TKO 9.2.1 TKO 9.2.1
When a profit forecast is to be given by a
Bidder orTarget to shareholders, theDirectors of the respectiveBidder orTarget :(a) are responsible for the compilation of the profit forecast; and(b) in so doing, must compile the forecast with the highest standards of objectivity, care and accuracy.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 9.2.1 Guidance
The hazards attached to the forecasting of profits must in no way detract from the necessity of maintaining the highest standards of accuracy and fair presentation in all communications to shareholders in a
Bid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 9.3 TKO 9.3 Assumptions
TKO 9.3.1
When a profit forecast appears in any document addressed to shareholders in connection with a
Bid , the material assumptions, including the commercial assumptions, upon which theDirectors have based their profit forecast, must be stated and explained in the document.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 9.3.2
When, after a
Bid Document has been posted, a profit forecast is given in a public announcement (whether by newspaper or any other means of publication), any assumptions on which the forecast is based must be included in the announcement.Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] RM164/2015 (Made 9th December 2015). [VER7/02-16]TKO 9.4 TKO 9.4 Reports in connection with profit forecasts
TKO 9.4.1
In all cases, the assumptions, accounting policies and calculations for a profit forecast must be examined and reported on by the auditors or reporting accountants.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 9.4.2
When income from land and buildings is a material element in a profit forecast, that part of the forecast must be examined and reported on by an independent external valuer. This
Rule does not apply where the income is virtually certain, for example, known rents receivable under existing leases.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 9.4.3 TKO 9.4.3
Any relevant profit forecast which has been made before the commencement of the
Bid Period must be examined, repeated and reported on in the document sent to shareholders.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 9.4.3 Guidance
The
DFSA may waive or modify the application of TKO Rule 9.3.3 if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of theseRules . In exceptional circumstances, theDFSA may accept that, because of the uncertainties involved, it is not possible for a forecast previously made to be reported on in accordance with theRules nor for a revised forecast to be made. In these circumstances, shareholders must be given a full explanation of why the requirements of theRules are not capable of being met.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 9.4.4
When a
Bid Document has been posted, the reports shall be included in the document containing the forecast or, when the forecast has been made in a public announcement (whether by newspaper or any other means of publication), in a document which shall be sent to shareholders with a minimum of delay after the announcement is published. The reports must be accompanied by a statement that those making them have given and not withdrawn their consent to publication.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 9.5 TKO 9.5 Statements to be treated as profit forecasts
TKO 9.5.1 TKO 9.5.1
The following statements must be treated as profit forecasts:
(a) an estimate of profit for a period which has already expired;(b) a profit forecast for a limited period (for example, for the following quarter); and(c) any unaudited interim and preliminary profit figures published during aBid Period , excepting unaudited statements of annual or interim results which have already been published.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 9.5.1 Guidance
1. When no figure is mentioned, or even if the word "profit" is not used, theDFSA may consider that certain forms of words constitute a profit forecast, particularly when considered in context. Examples include statements that "profits will be somewhat higher than last year" and "performance in the second half year is expected to be similar to our performance and results in the first half year" (when interim figures have already been published). Whenever a form of words puts a floor under, or a ceiling on, the likely profits of a particular period or contains the data necessary to calculate an approximate figure for future profits, it will be treated by theDFSA as a profit forecast which must be reported on in accordance with thisRule . In cases of doubt theDFSA must be consulted.2. A dividend forecast will not normally be considered a profit forecast unless, for example, it is accompanied by an estimate as to dividend cover.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 9.6 TKO 9.6 Miscellaneous rules relating to forecasts
TKO 9.6.1
When a
Bidder orTarget includes a forecast in a document, any document subsequently sent out by that entity in connection with thatBid must contain a statement by theDirectors that:(a) the forecast remains valid for the purpose of theBid ; and(b) the accountants and others who reported on the forecast have indicated that they have no objection to their reports continuing to apply.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 9.6.2
When a forecast of profit before taxation appears in a document addressed to shareholders, it must be accompanied by a forecast of earnings per
Share arising from the profit.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 9.6.3
Whenever a profit forecast is made in relation to a period in which trading has already commenced, any previously published profit figures in respect of any expired part of that trading period, together with comparable figures for the same part of the preceding year, must be stated.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 9.6.4
All the relevant provisions of this Section apply also to a profit forecast prepared on an inflation-adjusted basis, in which case:
(a) the basis of computation underlying such a forecast must be stated; and(b) the forecast must be accompanied by a corresponding forecast prepared on a historical cost basis.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 10 TKO 10 Asset Valuations
TKO 10.1 TKO 10.1 Valuations in connection with a bid
TKO 10.1.1 TKO 10.1.1
When a
Person provides a valuation of assets in connection with aBid , thePerson must ensure that the valuation is supported by the opinion of an appropriate external and independent valuer.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 10.1.1 Guidance
1. TKO Rule 10.1.1 applies not only to land, buildings and process plant and machinery but also to other assets, for example, inventory, ships, aircraft and individual parts of a business.2. ThisRule does not apply to an assessment of value carried out merely for the purpose of preparation of financial accounts.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 10.1.2
The person must ensure that such a valuation states:
(a) the effective date as at which the assets were valued;(b) the name, professional qualifications and address of the valuer; and(c) if the valuation is not current, that a current valuation would not be materially different.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 10.1.3 TKO 10.1.3
If a statement according with TKO Rule 10.1.2 cannot be made, the
Person must ensure that the valuation is updated.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 10.1.3 Guidance
1. In certain cases,Bid Documents andTarget Circulars issued by theBidder or theTarget will include statements of assets reproducingDirectors' estimates of asset values published with the entity's accounts. TheDFSA will not regard such estimates as "given in connection with aBid " except where asset values are a particularly significant factor in assessing theBid and the estimates are, accordingly, given considerably more prominence in the relevant documents than merely being referred to in a note or appendix to a statement of assets.2. In exceptional cases, certainReporting Entities , in particular property companies, which are the subject of an unexpectedBid may find difficulty in obtaining, within the time available, the opinion of an appropriate external valuer to support an asset valuation, as required by this Section, before theTarget Circular has to be sent out. In such cases, theDFSA may waive strict compliance with this requirement. TheDFSA will only do this where the interests of shareholders appear on balance to be best served by permitting informal valuations to appear coupled with such substantiation as is available.Targets or their advisers who wish to make use of this procedure should consult theDFSA at the earliest opportunity.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 10.2 TKO 10.2 Opinion and consent letters
TKO 10.2.1 TKO 10.2.1
Where a valuation of assets is given in any document addressed to shareholders:
(a) the document must include:(i) the opinion of the valuer; and(ii) a statement that the valuer has given and not withdrawn his consent to the publication of his valuation certificate;and(b) the valuation certificate must be made available for inspection in the manner described in TKO Rule 8.4.1, together with an associated report or schedule containing details of the aggregate valuation.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 10.2.1 Guidance
Where the
DFSA is satisfied that disclosure under TKO Rule 10.2.1(b) may be commercially disadvantageous to the entity concerned, it may modify these requirements so as to allow the report or schedule to appear in a summarised form. In certain cases, theDFSA may require any of these documents to be reproduced in full in a document sent to shareholders.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11 TKO 11 Bid Timing and Revision
TKO 11.1 TKO 11.1 Filing and posting the bid document and target circular
TKO 11.1.1 TKO 11.1.1
A
Bidder must:(a) post theBid Document to shareholders within 21 days of its announcement of a firm intention to make aBid ; and(b) give prior notice to theDFSA by filing a copy of theBid Document with theDFSA at least 1 day prior to such posting.Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM42/2007 (Made 15th February 2007). [VER2/02-07]TKO 11.1.1 Guidance
1. TheDFSA must be consulted if it is considered inappropriate or unlikely that theBid Document is posted within this period and may, in considering any appropriate waiver or modification, require that interest for the period of delay be included in theBid .2. TheDFSA will not consider the merits of theBid . It should not be assumed that because of this prior notification, theDFSA will not use powers available to it where the need for remedial action is subsequently identified.3. TheDFSA expects that theBid Document will be posted within 21 days of the announcement of a firm intention to make aBid unless the bid is subject to regulatory pre-conditions of a type acceptable to theDFSA . Such regulatory pre-conditions, if acceptable to theDFSA may be permitted by way of a modification to delay the posting and disclosure of the bid documents as required under TKO Rule 11.1.1(a) and (b) and TKO Rule 2.4.6. Any such acceptance must be obtained in the form of a modification pursuant to TKO Rule 16.1.4. See also TKO Rule 8.1.2 in relation to disclosure of theBid Document .Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM40/2007 (Made 8th February 2007). [VER2/02-07]TKO 11.1.2 TKO 11.1.2
The
Governing Body of theTarget must:(a) advise theTarget's shareholders of its views on theBid by posting aTarget Circular to the shareholders within 21 days of publication of theBid Document ; and(b) give prior notice to theDFSA by filing a copy of theTarget Circular with theDFSA at least 1 day prior to such posting.Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM42/2007 (Made 15th February 2007). [VER2/02-07]TKO 11.1.2 Guidance
2. TheDFSA will not consider the merits of the response to theBid . It should not be assumed that because of this prior notification, theDFSA will not use powers available to it where the need for remedial action is subsequently identified.Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM40/2007 (Made 8th February 2007). [VER2/02-07]TKO 11.2 TKO 11.2 Closing dates and extensions
TKO 11.2.1
A
Bidder must ensure that itsBid remains open for at least 35 days following the date on which theBid Document is posted.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.2.2 TKO 11.2.2
Where a
Bidder announces an extension of aBid , either the next closing date must be stated or, if theBid is unconditional as to acceptances, a statement may be made that theBid will remain open until further notice. In the latter case, at least 14 days' notice in writing must be given, before theBid is closed, to those shareholders who have not accepted.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.2.2 Guidance
There is no obligation to extend a
Bid , the conditions of which are not met by the first or any subsequent closing date.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.2.3
After a
Bid has become or is declared unconditional as to acceptances, theBidder must ensure that itsBid remains open for acceptance for not less than 14 days after the date on which it would otherwise have expired. When, however, aBid is unconditional as to acceptances from the outset, a 14 day extension is not required but theBidder must clearly and prominently set out the position in theBid Document .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.2.4 TKO 11.2.4
A
Bidder must comply with any firm statement made by it as to the duration of itsBid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.2.4 Guidance
If statements in relation to the duration of a
Bid such as "theBid will not be extended beyond a specified date unless it is unconditional as to acceptances" ("no extension statements") are included in documents sent to shareholders in theTarget , or are made by or on behalf of aBidder , itsDirectors , officials or advisers, and not withdrawn immediately if incorrect, then only in exceptional circumstances will theDFSA allow aBidder subsequently to extend itsBid beyond the stated date except where the right to do so has been specifically reserved.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.2.5 TKO 11.2.5
A
Bidder must not allow or declare itsBid (whether revised or not) to become unconditional as to acceptances after midnight (Dubai time) on the 67th day after the day the initialBid Document was posted.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.2.5 Guidance
The
DFSA may waive or modify the application of theseRules if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of theseRules . Note that a waiver of TKO Rule 11.2.5 will normally only be granted:a. if a competingBid has been announced (in which case bothBidders will normally be bound by the time-table established by the posting of the competingBid Document ); orb. if theGoverning Body of theTarget consents to an extension.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.2.6
On the 67th day after the day upon which the initial
Bid Document was posted (or any other date beyond which theBidder has stated that itsBid will not be extended) theBidder must make an announcement by 5.00pm (Dubai time) as to whether theBid is unconditional as to acceptances or has lapsed.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.2.7
All conditions must be fulfilled or the
Bid will lapse within 21 days of:(a) the first closing date; or(b) the date on which theBid becomes unconditional as to acceptances;whichever is the later.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.2.8 TKO 11.2.8
If the
Governing Body of theTarget proposes to announce any material new information after the 46th day following the posting of theBid Document , it must consult theDFSA in advance of making any such announcement.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.2.8 Guidance
1. TheDFSA should be consulted in good time. ThisRule does not displace the obligation upon a reporting entity to make timely disclosure of material information.2. Where a matter which might give rise to such an announcement being made after the 46th day is known to theTarget , every effort should be made to bring forward the date of the announcement.3. If an announcement of the kind referred to in thisRule is made after the 46th day, theDFSA will normally be prepared to grant an extension (by waiver or modification as necessary) to "Day 53" (see TKO rule 11.4.1) and/or "Day 67" (see TKO rule 11.2.5).4. For the purpose of TKO rule 11.2.8, material new information would include trading results, profit or dividend forecasts, asset valuations and proposals for dividend payments or for any material acquisition or disposal.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.3 TKO 11.3 Settlement of consideration
TKO 11.3.1
The consideration must be paid within 14 days of the date of the
Bid becoming or being declared unconditional and acceptance thereof, whichever is the later.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.4 TKO 11.4 Revision of bids
TKO 11.4.1 TKO 11.4.1
A
Bidder must ensure that itsBid , if revised, is kept open for at least 14 days following the date on which the revisedBid Document is posted.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.4.1 Guidance
1. No document revising theBid may therefore be posted within the 14 days ending on the last day theBid may become unconditional as to acceptances.2. TKO Rule 11.2.4 also applies in relation to revised bids. If statements in relation to the value or type of consideration such as "theBid will not be further increased" or "ourBid remains at x cents perShare and it will not be raised" ("no increase statements") are included in documents sent toTarget shareholders, or are made by or on behalf of aBidder , itsDirectors , officials or advisers, and not withdrawn immediately if incorrect, then only in exceptional circumstances will theDFSA permit theBidder to subsequently amend the terms of itsBid in any way, even if the amendment would not result in an increase of the value of theBid , except where the right to do so has been specifically reserved.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.4.2
Where a
Bid is revised, all shareholders who accepted the originalBid must be entitled to the revised consideration.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.4.3
The
Bidder may introduce new conditions only to the extent necessary to implement an increased or improvedBid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.5 TKO 11.5 Alternative bids
TKO 11.5.1
The provisions of the
Rules in TKO Section 11.2, TKO Section 11.3 and TKO Section 11.4 apply equally to alternativeBids , including cash alternatives.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.5.2 TKO 11.5.2
Where a firm statement has been made that an alternative
Bid will not be extended or reintroduced and that that alternativeBid has ceased to be open for acceptance, neither that alternative, nor any substantially similar alternative, may be reintroduced. Where, however, such a statement has not been made and an alternativeBid has closed for acceptance, aBidder is not precluded from reintroducing that alternative at a later date.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.5.2 Guidance
Reintroduction would constitute a revision of the
Bid and would, therefore, be subject to the requirements of, and only be permitted as provided in, theRules in TKO Section 11.4.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 11.6 TKO 11.6 Withdrawal of acceptances
TKO 11.6.1
A shareholder of the
Target who has accepted theBid may withdraw his acceptance:(a) from the date which is 14 days after the first closing date of the initialBid , if theBid has not by such date become or been declared unconditional as to acceptances; and(b) no later than the time that theBid becomes or is declared unconditional as to acceptances.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 12 TKO 12 Restrictions Following Bids
TKO 12.1 TKO 12.1 Delay of twelve months
TKO 12.1.1
Where a
Bid has been announced or posted but has not become or been declared unconditional and has been withdrawn or has lapsed, neither theBidder , nor anyPerson who acted in concert with theBidder in the course of the originalBid , nor anyPerson who is subsequently acting in concert with any of them, may within 12 months from the date on which suchBid is withdrawn or lapses either:(a) make aBid for the relevantShares of theTarget (including a partialBid which could result in theBidder holdingShares carrying 30% or more of the voting rights of theTarget ); or(b) acquire anyShares of theTarget if theBidder or any suchPerson would thereby become obliged under TKO Chapter 4 to make aBid ;(c) acquire anyShares of theTarget or any rights over suchShares if theShares and rights overShares held by any suchPerson , together withPersons acting in concert with him, would in aggregate carry 30% or more of the voting rights of theTarget .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 12.1.2
The restrictions in TKO Rule 12.1.1 also apply following a partial
Bid which could result in a holding of not less than the 30% and not more than 50% of the voting rights of theTarget whether or not theBid has become or been declared unconditional. When such aBid has become or been declared unconditional, the period of 12 months runs from that date.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 13 TKO 13 Partial Bids
TKO 13.1 TKO 13.1 Application of this chapter
TKO 13.1.1
The provisions of this TKO Chapter 13 apply to partial
Bids .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 13.2 TKO 13.2 DFSA consent required
TKO 13.2.1 TKO 13.2.1
A potential
Bidder must obtain theDFSA's prior consent for any partialBid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 13.2.1 Guidance
1. Consent will normally be granted under TKO Rule 13.2.1 where aBid could not result in theBidder holdingShares carrying 30% or more of the voting rights of aTarget .2. In the case of aBid which could result in theBidder holdingShares carrying 30% or more but less than 100% of the voting rights of aTarget , such consent will not normally be granted if theBidder orPersons acting in concert with it have acquired, selectively or in significant numbers,Shares in theTarget during the 12 months preceding the application for consent or ifShares have been purchased at any time after the partialBid was reasonably in contemplation.Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 13.3 TKO 13.3 Restrictions and requirements
TKO 13.3.1
The
Bidder andPersons acting in concert with it must not purchaseShares in theTarget during theBid Period .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 13.3.2
In the case of a successful partial
Bid , neither theBidder , nor anyPerson who acted in concert with theBidder in the course of the partialBid , nor anyPerson who is subsequently acting in concert with any of them, may purchase suchShares during a period of 12 months after the end of theBid Period .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 13.3.3
When a
Bid is made which may result in theBidder holdingShares carrying not less than 30% and not more than 50% of the voting rights of aTarget , theBidder must:(a) state the precise number ofShares sought to be acquired; and(b) ensure that theBid is not declared unconditional as to acceptances unless acceptances are received for not less than that number.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 13.3.4 TKO 13.3.4
A
Bidder must ensure that anyBid which could result in theBidder holdingShares carrying 30% or more of the voting rights of aTarget is conditional on:(a) a specified number of acceptances being received, and(b) approval of theBid being given by shareholders holding over 50% of the voting rights not held by theBidder andPersons acting in concert with it.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 13.3.4 Guidance
1. Approval is normally signified by means of a separate box on the form of acceptance.2. The requirement under TKO Rule 13.3.4 may on occasion be waived if over 50% of the voting rights of theTarget are held by one shareholder.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 13.3.5
In making a partial
Bid , theBidder must:(a) make theBid to all shareholders of a class;(b) make arrangements for those shareholders who wish to do so to accept in full for the relevant percentage of their holdings;(c) ensure thatShares tendered in excess of this percentage are accepted by theBidder from each shareholder in the same proportion to the number tendered to the extent necessary to enable it to obtain the total number ofShares which it has sought to acquire.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 13.3.6 TKO 13.3.6
When a
Bid is made for aTarget with more than one class of equityShare capital which may result in theBidder holdingShares carrying 30% or more of the voting rights,Bids for each class must be fair and appropriate.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 13.3.6 Guidance
The
DFSA should be consulted in advance of any such case.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 14 TKO 14 Redemption or Acquisition of Own Capital
TKO 14.1 TKO 14.1 Redemption or acquisition of own shares
TKO 14.1.1 TKO 14.1.1
When a
Reporting Entity redeems or acquires its own votingShares , any resulting increase in the percentage of voting rights held by a shareholder or group of shareholders acting in concert must be treated as an acquisition for the purpose of theRules in TKO Chapter 4.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 14.1.1 Guidance
1. TheDFSA should be consulted in advance in any case where thisRule may become relevant. In appropriate circumstances theDFSA may waive any resulting obligation to make a generalBid if there is a vote of independent shareholders and appropriate procedures are followed. See TKO Chapter 16.2. In the case of a redemption or reduction of capital which has as its purpose the elimination of a minority shareholding, theDFSA may in appropriate circumstances require that at the relevant meetings the majority votes must be excluded.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 14.1.2 TKO 14.1.2
Where an obligation to extend a
Bid arises as a consequence of application of TKO Rule 14.1.1, then, for the purposes of theseRules :(a) theReporting Entity undertaking the redemption or acquisition is deemed to be theTarget ;(b) where the obligation to extend theBid arises as a consequence of a shareholder obtaining or consolidating control as a result of the redemption or purchase by theReporting Entity of its own shares, that shareholder must extend aBid ;(c) where the obligation to extend theBid arises as a consequence of a group ofPersons acting in concert obtaining or consolidating control as a result of the redemption or purchase by theReporting Entity of its own shares, each suchPerson must extend aBid ; and(d) the provisions of theseRules relating to disclosure and, where possible, timing and periods of notice will apply with any necessary adaptation to meet that purpose.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 14.1.2 Guidance
Where an obligation to make a
Bid arises as a consequence ofPersons acting in concert, theDFSA should be consulted at the earliest opportunity to determine whether any waiver or modification of thisRule is appropriate. See also TKO Rule 4.1.1 and accompanyingGuidance .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 14.1.3 TKO 14.1.3
Any redemption or acquisition of
Securities of theBidder orShares of theTarget made or to be made in terms of aBid or any such redemption or acquisition effected within 12 months prior to the commencement of theBid Period must be disclosed in accordance with TKO Section 3.4 and in all relevantBid Documents andTarget Circulars .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 14.1.3 Guidance
Nothing in this
Rule limits or displaces any obligation of disclosure that aBidder orTarget or otherPerson may have aside from theseRules and irrespective of the existence of, or obligation to extend, aBid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 14.2 TKO 14.2 Other methods of bid
TKO 14.2.1
Where a
Bid is implemented by a scheme of arrangement or conversion ofSecurities or any other method, then, for the purposes of theseRules :(a) theDFSA must be consulted in advance;(b) in the case of a scheme of arrangement, theReporting Entity in respect of which the scheme is proposed is deemed to be theTarget , and thePersons who will be the holders ofShares of theReporting Entity after the scheme of arrangement has been sanctioned are deemed to be theBidder ; and(c) the provisions of theseRules relating to disclosure and, where possible, timing and periods of notice will apply with any necessary adaptation to meet that purpose.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 15 TKO 15 [Deleted]
[Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]TKO 15.1 TKO 15.1 [Deleted]
[Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]TKO 15.1.1 TKO 15.1.1 [Deleted]
[Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07][Deleted]
[Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]TKO 15.1.2 TKO 15.1.2 [Deleted]
[Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07][Deleted]
[Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]TKO 15.1.3 [Deleted]
[Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]TKO 15.1.4 [Deleted]
[Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]TKO 15.1.5 [Deleted]
[Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]TKO 15.2 TKO 15.2 [Deleted]
[Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]TKO 15.2.1 [Deleted]
[Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]TKO 15.2.2 [Deleted]
[Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]TKO 15.2.3 [Deleted]
[Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]TKO 15.2.4 TKO 15.2.4 [Deleted]
[Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07][Deleted]
[Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]TKO 16 TKO 16 Waivers or Modifications
TKO 16.1 TKO 16.1 Applications to waive or modify the Markets Law 2012 and rules
TKO 16.1.1
A
Person wishing to seek a waiver or modification of a provision of the Law orRules as it applies to him, must:(a) apply in writing to theDFSA ;(b) clearly identify the provision in relation to which he seeks a waiver or modification;(c) ensure that the application is accompanied by a statement of the reasons supporting the application; and(d) pay the prescribed fee (if any).
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 16.1.2 TKO 16.1.2
In considering the application, the
DFSA may:(a) carry out any enquiries which it considers appropriate;(b) require the applicant to provide additional information in such form as theDFSA considers appropriate;(c) require any information furnished by the applicant to be verified in such manner as theDFSA may specify; and(d) take into account any information which it considers appropriate in relation to the application.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO 16.1.2 Guidance
1. Under Article 9 of the Markets Law 2012 theDFSA may waive or modify the application of the Markets Law 2012 or of theRules .2. TheDFSA may grant a waiver or modification from the application of theRules where aTakeover transaction is subject to the dual jurisdiction of theDFSA and a regulator or agency of a jurisdiction other than theDIFC . While applications will be considered on a case by case basis, it should be expected that the factors that theDFSA will take into account in considering such an application will include:(a) whether the application of legislation or procedures of that other jurisdiction will or will not adequately and properly govern the transaction;(b) whether such legislation or procedures will or will not provide shareholder protection in a manner commensurate with theseRules ,DIFC Law and international best practice;(c) whether the grant of the application is or is not in the interests of theDIFC .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]TKO 17 TKO 17 Enforcement
TKO 17.1 TKO 17.1 Applicable provisions
TKO 17.1 Guidance
1. The Takeover Rules (including theTakeover Principles in TKO Section 1.5) have the force of law. A failure to comply with a rule may constitute a contravention by virtue of Article 85 of theRegulatory Law 2004. Those that seek to take advantage of the facilities of theSecurities markets in theDIFC should conduct themselves in matters relating toTakeover s not only in accordance with the Takeover Rules but also in accordance with the highest business standards.2. Part 6 of the Markets Law 2012 addresses prevention of market misconduct, and Part 7 addresses contraventions and proceedings. Article 68 of the Markets Law 2012 provides that theDFSA may apply to theCourt to obtain an order or orders against aPerson who has contravened the Markets Law 2012 or theRules . These include, by Article 68(1)(e), orders in relation to activities relating toTakeover s. Under Article 70(2), theFMT also has jurisdiction to make a finding or declaration of unacceptable circumstances and additional orders as it sees fit.Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]
[Amended] DFSA RM142/2014 (Made 21st August 2014). [VER6/06-14]TKO App1 TKO App1 Contents of Bid Documents
TKO A1.1 TKO A1.1 Disclosure as to the bidder and its intentions
TKO A1.1.1
The
Bidder must disclose the following information:(a) the name and address of theBidder ;(b) the name and address of any financial adviser or other person making theBid on behalf of theBidder ;(c) the identity of anyPersons acting in concert with theBidder ;(d) whether or not anySecurities acquired in pursuance of theBid will be transferred to any otherPersons and, if so, the names of any suchPersons and details of any such agreement, arrangement or understanding;(e) the names of theDirectors of theBidder and their direct and indirect interests, if any, in theBidder andTarget ;(f) the nature and particulars of the business of theBidder and its financial and trading prospects;(g) theBidder's reasons for theBid ;(h) theBidder's intentions regarding the continuation of the business of theTarget ;(i) theBidder's intentions regarding any major changes to be introduced in the business of theTarget , including any redeployment of the fixed assets of theTarget ;(j) theBidder's intentions with regard to the continued appointment ofDirectors and employment of the employees of theTarget and of its subsidiaries.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO A1.2 TKO A1.2 Financial Disclosure in Securities Exchange Bid
TKO A1.2.1
In the case of a
Securities Exchange Bid , theBidder must disclose the following information relating to the financial affairs of theBidder :(a) for the past 3 financial years for which the information has been published, turnover, net profit or loss before and after taxation, the amount of tax, extraordinary items, minority shareholders' interests, the amount absorbed by dividends and earnings and dividends perShare ;(b) a statement of the assets and liabilities shown in the latest published audited accounts;(c) a cash flow statement if provided in the latest published audited accounts;(d) all known material changes in the financial or trading position of theBidder subsequent to the latest published audited accounts or a statement that there are no known material changes;(e) details relating to items referred to in paragraph (a) above in respect of any interim statement or preliminary announcement made since the latest published audited accounts;(f) inflation-adjusted information relating to paragraphs (a) and (b) if any has been published;(g) significant accounting policies together with any points from the notes to the accounts which are of major relevance to an appreciation of the figures, including those relating to inflation adjusted information;(h) a description of how theBid is to be financed and the source of the finance, including details of the principal lenders or arrangers of such finance;(i) details of any reorganisation of capital including capital raisings during the two financial years preceding the commencement of theBid Period ; and(j) details of any bank overdrafts or loans, or other similar indebtedness, mortgages, charges or guarantees or other material contingent liabilities of theBidder and any of its subsidiaries, or, if there are no such liabilities, a statement to such effect.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO A1.2.2
The figures to be disclosed under TKO A1.2.1 (a) and (b) must be adjusted to eliminate material unusual and non-recurring items and the nature of the adjustments made must be disclosed.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO A1.2.3
Where, because of a change in accounting policy, figures are not comparable to a material extent, this must be disclosed and where possible the approximate amount of the resultant variation must be stated.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO A1.3 TKO A1.3 Disclosure of shareholdings and dealings
TKO A1.3.1
The
Bidder must disclose:(a) the shareholdings of theBidder in theTarget ;(b) the holdings ofSecurities in theBidder (in the case of aSecurities Exchange Bid only) and in theTarget in which eachDirector of theBidder is directly or indirectly interested;(c) the holdings ofSecurities in theBidder (in the case of aSecurities Exchange Bid only) and in theTarget which anyPerson acting in concert with theBidder owns or controls, together with the name of suchPerson acting in concert;(d) the holdings ofSecurities in theBidder (in the case of aSecurities Exchange Bid only) and in theTarget owned or controlled by anyPerson who, prior to the posting of theBid Document , has irrevocably committed himself to accept theBid , together with the name of suchPerson .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO A1.3.2
If in any of the above categories there are no holdings of
Shares orSecurities , this fact must be stated, provided that this does not apply to the category in TKO A1.3.1(d) if there are no such irrevocable commitments.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO A1.3.3
If any
Person whose holdings ofShares orSecurities are required by this Section to be disclosed has dealt for value in theShares in question during the period beginning six months prior to theBid Period and ending with the latest practicable date prior to the posting of theBid Document , the details, including dates and prices, must be stated. If no such dealings have taken place, this fact must be stated.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO A1.4 TKO A1.4 Other disclosures
TKO A1.4.1 TKO A1.4.1
The
Bidder must disclose the following information:(a) the price or other consideration to be paid for theShares ;(b) precise particulars of theShares in respect of which theBid is made and whether they are to be acquired cum or ex any dividend or other distribution which has been or may be declared;(c) the terms of theBid and its proposed implementation and the mechanics thereof;(d) all conditions applicable to theBid ;(e) a statement to the effect that settlement of the consideration to which any shareholder is entitled under theBid will be implemented in full in accordance with the terms of theBid without regard to any lien, right of set-off, counterclaim or other analogous right to which theBidder may otherwise be, or claim to be, entitled against such shareholder;(f) particulars of all documents required, and procedures to be followed, for acceptance of theBid ;(g) whether theBidder intends to avail itself of any powers of compulsory acquisition;(h) in the case of a partialBid , the reasons for making a partialBid rather than a fullBid ;(i) where theBid is for cash or includes an element of cash or other assets not comprisingSecurities , theBid Document must include confirmation by a financial adviser or by an appropriate external and independentPerson (for example, theBidder's bank) that resources are available to theBidder sufficient to satisfy full acceptance of theBid ;(j) a statement on whether or not any agreement, arrangement or understanding (including any compensation arrangement) exists between theBidder or anyPerson acting in concert with it and any of theDirectors of theTarget orPersons who wereDirectors within the preceding 12 months, or shareholders orPersons who were shareholders within the preceding 12 months, having any connection with or dependence upon theBid ;(k) a statement on whether or not any agreement, arrangement or understanding exists between aBidder and theTarget andPersons acting in concert with them in relation to theShares ;(l) full particulars of any such agreement, arrangement or understanding referred to in (j) and (k); and(m) where theBid involves the issue of unlistedSecurities , an estimate of the value of suchSecurities provided by an external independent adviser, together with the assumptions and methodology used in arriving at that value.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO A1.4.1 Guidance
1. For the purposes of TKO A1.4.1(i), thePerson confirming that resources will be available will not be expected to produce the cash itself if, in giving the confirmation, it acts responsibly and has taken all reasonable steps to assure itself that the cash will be available.2. TheDFSA may waive or modify the application of certain provisions of this TKO A1.4 if it is satisfied that circumstances are appropriate. See Chapter 16 of theseRules . In relation to TKO A1.4.1(e), note that theDFSA will only grant a waiver or modification in exceptional circumstances and where all shareholders are to be treated equally.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO A1.4.2
In the case of a
Securities Exchange Bid , theBidder must provide the following additional information:(a) a summary of the principal contents of each material contract (not being a contract entered into in the ordinary course of business) entered into by theBidder or any of its subsidiaries during the period beginning two years before the commencement of theBid Period , including particulars of dates, parties, terms and conditions and any consideration passing to or from theBidder or any of its subsidiaries;(b) whether and in what manner the emoluments of theDirectors of theBidder will be affected by the acquisition of theTarget or by any other associated transaction, or, if there will be no affect, a statement to that effect;(c) details of the authorised and issuedShare capital and the rights of shareholders in respect of capital, dividends and voting;(d) details of any material litigation to which theBidder is, or may become, a party; and(e) how and when the documents of title to theSecurities will be issued.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO App2 TKO App2 Contents of Target Circulars
TKO A2.1 TKO A2.1 Disclosure in initial target circular
TKO A2.1.1
The
Governing Body of theTarget must disclose the following information:(a) the substance of the advice given to it by its external advisers;(b) where relevant, its views on the statements in theBid Document regarding theBidder's intentions in respect of theTarget and itsDirectors made pursuant to TKO A1.1;(c) details of the holdings ofSecurities of theTarget in theBidder ;(d) details of the holdings ofShares in theTarget andSecurities in theBidder in whichDirectors of theTarget are directly or indirectly interested;(e) details of the holdings ofShares in theTarget and (in the case of aSecurities Exchange Bid only) ofSecurities in theBidder which anyPerson acting in concert with theTarget owns or controls and the holdings ofShares in theTarget and, (in the case of aSecurities Exchange Bid only) ofSecurities in theBidder , owned or controlled by a subsidiary of theTarget , or by anyPerson acting in concert with it;(f) details of the holdings ofShares in theTarget and (in the case of aSecurities Exchange Bid only) ofSecurities in theBidder owned or controlled by aPerson who has any agreements, arrangements or understandings of the kind referred to in TKO A1.4.1 (j) and (k) with theTarget or with anyPerson acting in concert with theTarget ;(g) details of any agreements, arrangements or understandings of the kind referred to in TKO A1.4.1 (j) and (k) or, if there are none, a statement to that effect;(h) material particulars of all service contracts of anyDirector or proposedDirector of theTarget with the entity or any of its subsidiaries, or, if there are none, a statement to that effect; and(i) whether theDirectors of theTarget intend, in respect of their own beneficial holdings ofShares , to accept or reject theBid .
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO A2.1.2
If any
Person whose holdings ofShares orSecurities are required by TKO A2.1.1 to be disclosed has dealt for value in theShares orSecurities in question during the period beginning six months prior to theBid Period and ending with the latest practicable date prior to the posting of theTarget Circular , the details, including dates and prices, must be stated. If no such dealings have taken place, that fact must be stated.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO A2.2 TKO A2.2 Financial disclosure
TKO A2.2.1
The
Target must disclose the following information relating to its financial affairs:(a) for the past 3 financial years for which the information has been published, turnover, net profit or loss before and after taxation, the amount of tax, extraordinary items, minority shareholders' interests, the amount absorbed by dividends and earnings and dividends perShare ;(b) a statement of the assets and liabilities shown in the latest published audited accounts;(c) a cash flow statement if provided in the latest published audited accounts;(d) all known material changes in the financial or trading position of theTarget subsequent to the latest published audited accounts or a statement that there are no known material changes;(e) details relating to items referred to in paragraph (a) above in respect of any interim statement or preliminary announcement made since the latest published audited accounts;(f) inflation-adjusted information relating to paragraphs (a) and (b) if any has been published;(g) significant accounting policies together with any points from the notes to the accounts which are of major relevance to an appreciation of the figures, including those relating to inflation adjusted information;(h) details of any reorganisation of capital including capital raisings during the two financial years preceding the commencement of theBid Period ; and(i) details of any bank overdrafts or loans, or other similar indebtedness, mortgages, charges or guarantees or other material contingent liabilities of theTarget and any of its subsidiaries, or, if there are no such liabilities, a statement to such effect.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO App3 TKO App3 Contents of Subsequent Documents
TKO A3.1 TKO A3.1 Obligation to update material information
TKO A3.1.1
Documents subsequently sent to shareholders of the
Target by either theBidder orTarget must contain details of any material changes in information previously published by or on behalf of the relevantBidder orTarget during theBid Period . If there have been no such changes, this must be stated.
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO A3.1.2
Without limiting the application of TKO A3.1.1, the following matters must be updated:
(b)Directors' emoluments (TKO A1.4.2(b));(c) special arrangements (TKO A1.4.1(j));(e) changes toDirectors' service contracts (TKO A2.1.1(h)); and(f) agreements, arrangements or understandings in relation toBids (Rules TKO A1.4.1(j) and (k) and TKO A2.1.1(f) and (g)).
Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]TKO App4 [Deleted]
[Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]