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
Rulesin this Module (TKO) comprise the Takeover Rules referred to in the Markets Law 2012.
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.
TKO 1.1.2 Guidance1. The
Rulesin this Module (TKO) are made in accordance with Article 8 of the Markets Law 2012.2. The purpose of these Rulesis set out in Article 51 of the Markets Law 2012, being to:a. ensure that a Takeovertakes 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 a Takeoveris conducted.3. The Rulesthroughout this Module are based upon and should be read in conjunction with the Takeover Principlesas prescribed in TKO Section 1.5.4. The Rulesare not concerned with the financial or commercial advantages or disadvantages of a Takeover. These are matters for the Biddersand Targetsand their shareholders.5. When there is any doubt whatsoever as to whether a proposed course of conduct is in accordance with the Takeover Principlesor with other more specific Rules, parties or their advisers should consult the DFSAin advance to obtain guidance.6. Takeovertransactions may from time to time be subject to the dual jurisdiction of the DFSAand a regulator of another jurisdiction. In such cases, early consultation should take place with the DFSAas to how any conflicts between the relevant rules and regulations may be resolved. In appropriate circumstances, a waiver or modification from these Rulesmay be appropriate — see the Guidanceto TKO Chapter 16.
TKO 1.2 TKO 1.2 Application of these rules
TKO 1.2.1 TKO 1.2.1
Rulesin this Module (TKO) apply to Personsto whom the Markets Law 2012 applies, and in particular:(a) Reporting Entitiesas Targetsor potential Targetsunder the Rules;(b) Biddersor potential Biddersand any Personacting in concert with them;(c) Directorsand officers of Targetsand Bidders; and(d) professional advisers in relation to a Takeovertransaction.
TKO 1.2.1 Guidance1. The
Rulesapply to Takeovertransactions, however effected, including:a. partial Bids;b. Bidsby a parent entity for Sharesin its subsidiary; andc. certain other transactions where control of a Reporting Entityis to be obtained or consolidated.2. Each Directorof a Bidderand of the Targethas a responsibility to ensure, so far as he is reasonably able, that these Rulesare complied with in the conduct of a Bid. Financial advisers have a particular responsibility to comply with the Rulesand to ensure, so far as they are reasonably able, that a Bidderand the Target, and their respective Directors, are aware of their responsibilities under the Rulesand will comply with them. Financial advisers should also be mindful of conflicts of interest.
Subject to TKO Rule 1.2.3, the
Rulesapply to offers or bids for Sharesof a Reporting Entity, and also to Convertibles, options and subscription rights relating to a Reporting Entityas provided TKO Section 6.2 of the Rules.
TKO 1.2.3 TKO 1.2.3
Rulesdo not apply in respect of offers or bids for Sharesof a Personwho is a Reporting Entitysolely by reason of one or more of the following:(a) the Personhas filed a prospectus with the DFSAunder Article 14 of the Markets Law 2012 for the sole purpose of issuing Securitiesthat:(i) are not Sharesnor Securitiesthat are convertible to Shares; and(ii) do not confer, directly or indirectly, a voting right;(b) the Personhas or had, at any time, Securitiesadmitted to an Official List of Securitieswhere such Securities:(i) are not Sharesnor Securitiesthat are convertible to Shares; and(ii) do not confer, directly or indirectly, a voting right; or(c) the Personmerged with or acquired a Reporting Entityto which, by reason of this Ruleor otherwise, these Rulesdo not apply.
TKO 1.2.3 Guidance
In exceptional cases, the
DFSAmay waive or modify the application of the Rulesif it is satisfied that circumstances are appropriate. See TKO Chapter 16 of these Rules. For example, the DFSAmay, in appropriate circumstances, waive the application of the Rulesin relation to a Personwho is a Reporting Entitysolely by reason of the DFSAhaving declared that the Personis a Reporting Entity.
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
FMThas 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 the Regulatory Lawsets out who may bring a regulatory proceeding before the FMT.[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" comprise Persons, who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition by any of them of Sharesin a Reporting Entity, to obtain or consolidate control of that Reporting Entity.
TKO 1.4.1 Guidance
DFSAwill presume (without limiting the general application of the definition in the Markets Law 2012) that the following Personswill be "acting in concert" with other Personsin 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 equity Sharecapital of a company is regarded as the test of associated company status);b. a company with any of its Directors(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 other Personwhose 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 and Personscontrolling, controlled by or under the same control as the adviser; andf. Directorsof a Reporting Entitywhich is subject to a Bidor where the Directorshave reason to believe a bona fide Bidfor their Reporting Entitymay be imminent.
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.
For the purpose of these
Rules, an investment manager or stockbroker will be "connected" with a Bidderor the Target, as the case may be, if the investment manager and/or stockbroker is controlled by, controls or is under the same control as:(a) a Bidder;(b) the Target;(c) any bank or financial or other professional advisers to a Bidderor the Target; or(d) an investor in a consortium (for example, through a special purpose vehicle formed for the purpose of making a Bid).
For the purpose of these
Rules, "control" means a holding, or aggregate holdings, of Sharescarrying 30% or more of the voting rights of a Person, 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.
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.
For the purpose of these
Rules, a "purchase" or other acquisition of Shares, where relevant, includes the purchase of Sharesassented to a Bid.
For the purpose of these
Rules, a "right" over Sharesincludes any right acquired by a Personby virtue of an agreement to purchase Sharesor an option to acquire Sharesor an irrevocable commitment to accept a Bidto be made by him or an agreement to acquire voting rights or general control of them.
For the purpose of these
Rules, a " Securities Exchange Bid" is a Bidin which the consideration includes Securitiesof the Bidderor any other Person.
TKO 1.4.9 TKO 1.4.9
For the purpose of these
Rules, "voting rights" means all the voting rights attributable to the Sharecapital of a Reporting Entitywhich are currently exercisable at a general meeting.
TKO 1.4.9 Guidance
Where a waiver or modification is sought as per
GuidanceNote 1 to TKO Rule 4.1.3, consideration should also be given as to whether the definition of "voting rights" will require consequential modification.
TKO 1.5 TKO 1.5 The takeover principles
All shareholders of a
Targetmust be treated fairly by a Bidderand all shareholders of the same class must be treated equally.
TKO 1.5.2 TKO 1.5.2
During the course of a
Bid, or when a Bidis contemplated, neither a Bidder, nor a Target, 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 a Targetor its adviser to a bona fide potential Bidderor its adviser, or vice versa.
TKO 1.5.2 Guidance
Where information is disclosed in confidence to a
Bidderor Target, a Directormay receive material information in his capacity as Director. That Director, or his associates, may also hold shares in the Bidderor Targetin a personal capacity. In these circumstances, a Directorshould be mindful of his duties, including in relation to conflicts of interests and misuse of position. Directorsshould also be well aware of restrictions and prohibitions under the Markets Law 2012 including Article 42 relating to insider dealing.
Biddermust only announce a Bid:(a) after the most careful and responsible consideration; and(b) when the Bidderhas every reason to believe that it can and will continue to be able to implement the Bid.
Bidderand Targetmust:(a) give shareholders of the Targetsufficient time and information to enable them to reach a properly informed decision on a Bid; and(b) not withhold any material information from the shareholders of the Target.
Any document or advertisement addressed to shareholders containing information or advice from a
Bidderor the Targetor their respective Governing Bodiesor advisers must be prepared with the highest standards of fairness, care and accuracy.
Biddersand Targetsmust use every endeavour to prevent the creation of a false market in the Securitiesof a Bidderor the Sharesof a Target. Parties involved in Bidsmust take care that statements are not made which may mislead shareholders or the market.
At no time after a bona fide
Bidhas been communicated to the Governing Bodyof a Target, or after the Governing Bodyof a Targethas reason to believe that such a Bidmight be imminent, may any action be taken by the Governing Bodyof the Target, without the approval of the shareholders in general meeting, which could effectively result in any bona fide Bidbeing frustrated or in the shareholders being denied an opportunity to decide on its merits.
Bidderand Targetmust exercise rights of control in good faith and without the oppression of a minority.
Governing Bodyof a Targetmust act in the interests of the Targetas a whole. The shareholders' interests, taken as a whole, must be considered when a Governing Bodyor its Directorsare giving advice to shareholders.
Directorsof a Bidderand the Targetmust, in advising their shareholders, act only in their capacity as Directorsand not have regard to their personal or family shareholdings or to their personal relationships with the Bidderor Target. Directorsof the Targetmust give careful consideration before they enter into any commitment with a Bidder(or anyone else) which would restrict their freedom to advise their shareholders in the future.
Person(or Personsacting in concert) acquires control of a Reporting Entity, a general Bidto 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 a Personmay 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 a Bid.
TKO 1.5.12 TKO 1.5.12
Personsconcerned with a Takeoverwhich is subject to the Takeover Rules must co-operate to the fullest extent with the DFSAand provide all relevant information.
TKO 1.5.12 Guidance1. These
Takeover Principlesare prescribed in accordance with Article 53 of the Markets Law 2012. The principles have the full force and effect of Rulesand 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 these Rulesdo not define the precise extent of, or the limitations on, their application.2. The remaining Rulesin this Module effectively expand upon these Takeover Principles, and provide examples of their application and make provision governing specific aspects of Takeoverprocedure. Although most of the Rulesare expressed in more detailed language than the Takeover Principles, they are not framed in technical language and, like the Takeover Principles, are to be interpreted to achieve their underlying purpose. Therefore, their spirit must be observed as well as their letter and the DFSAmay 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 these Rules.
TKO 2 TKO 2 The Approach, Announcements and Advice
TKO 2.1 TKO 2.1 The approach
Personmust, in making a Bidor in making an approach with a view to a Bidbeing made, make such Bidor approach in the first instance to the Governing Bodyof the Targetor to its duly authorised advisers.
Bidor approach is made by a Personon behalf of an ultimate Bidderor potential Bidder, the Personmust disclose the identity of the ultimate Bidderor potential Bidderat the outset of making the Bidor approach.
Biddermust, upon receiving a request from the Governing Bodyof the Target, provide information reasonably required to verify that the Bidderis, or will be, in a position to implement the Bidin full.
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
Personprivy to confidential information, which constitutes Material Informationor otherwise, concerning a Bidor contemplated Bidmust treat that information as secret and may only pass it to another Personif:(a) it is necessary to do so; and(b) that Personis made aware of the need for secrecy.
TKO 2.2.1 Guidance
Other legislation similarly applies to use and disclosure of confidential information.
Personsassociated with potential Takeovertransactions should, for instance, be well aware of restrictions and prohibitions under the Markets Law 2012 including Article 58 relating to insider dealing.
TKO 2.2.2 TKO 2.2.2
Personconcerned in a Bidor contemplated Bidmust take reasonable steps so as to minimise the chances of an accidental leak of information.
TKO 2.2.2 Guidance
Bidderor Targetshould 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.
TKO 2.3 TKO 2.3 Announcement of a possible bid
TKO 2.3 Guidance
An announcement of a possible
Bidis intended to preserve the integrity of trading in a Reporting Entity's Shareson the Authorised Market Institution, or any other exchange upon which that entity's Sharesare traded, preceding or during negotiations which may lead to an announcement of a firm intention to make a Bid.
TKO 2.3.1 TKO 2.3.1
Biddermust make an announcement of a possible Bidwhen, before approaching a potential Target:(a) either:(i) the potential Targetis the subject of rumour and speculation; or(ii) there is an abnormal movement in the price of the potential Target's Shares; and(b) there are reasonable grounds to conclude that it is the potential Bidder'sactions (whether through inadequate security or otherwise) which have led to the situation.
TKO 2.3.1 Guidance1. As a consequence of this rule, the potential
Biddershould keep a close watch on the potential Target's Shareprice for any signs of untoward movement.2. The DFSAshould be consulted at the latest when a potential Targetbecomes the subject of any rumour and speculation or where there is a material or abrupt movement in its share price after the time when a Bidis first actively considered.3. Additional information may be the subject of a later supplementary announcement.4. A potential Biddershould consult with the DFSAat the earliest opportunity where the requirement to make an announcement pursuant to TKO Rule 2.3.1 may be considered inappropriate. The DFSAmay waive or modify the application of the rule if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of these Rules.
TKO 2.3.2 TKO 2.3.2
Targetmust make an announcement of a possible Bidwhen, following an approach to it which may or may not lead to a Bid:(a) the Targetis the subject of rumour and speculation; or(b) there is an abnormal movement in the price of the Target's Shares; or(c) negotiations or discussions are about to be extended to include more than a very restricted number of Persons(outside those in the entities concerned who need to know and their immediate advisers).
TKO 2.3.2 Guidance1. As a consequence of this
Rule, the Targetshould keep a close watch on its Shareprice for any signs of untoward movement.2. The DFSAshould be consulted at the latest when the Targetbecomes the subject of any rumour and speculation or where there is a price movement of 10% or more above the lowest Shareprice 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, the DFSAmay 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.
TKO 2.3.3 TKO 2.3.3
An announcement of a possible
Bidmust:(a) name the potential Bidder; and(b) state that the shareholders concerned should exercise caution in dealing in their Shares.
TKO 2.3.3 Guidance
The announcement of a possible
Bidmay be brief and couched in general terms and should, in the normal course, state that talks are taking place or that a potential Bidderis considering making a Bidor that an announcement is pending which could have a material effect on the price of the Shares.
TKO 2.4 TKO 2.4 Announcement of a firm intention to make a bid
TKO 2.4.1 TKO 2.4.1
Biddermust make an announcement of a firm intention to make a Bidimmediately upon:(a) giving any notification to the Targetas described in TKO Rule 2.4.2; or(b) an acquisition of Shareswhich gives rise to an obligation to make a Mandatory Bidunder TKO Chapter 4 of these Rules;
whichever is the earlier.
TKO 2.4.1 Guidance
The respective obligations of the
Targetand of the Bidderto make announcements under these Rulesmay be satisfied by the making of a joint announcement.
Targetmust make an announcement when the Governing Bodyof the Targethas been notified of a firm intention to make a Bidfrom a serious source, irrespective of the attitude of the Governing Bodyto the Bid.
TKO 2.4.3 TKO 2.4.3
An announcement by the
Bidderof a firm intention to make a Bidmust contain:(a) the identity of the Bidder;(b) the principal terms of the Bid;(c) details of any existing holding of Sharesin the Target:(i) which the Bidderowns or over which it has control;(ii) which is owned or controlled by any Personacting in concert with the Bidderor in respect of which the Bidderhas received an irrevocable commitment to accept the Bid;(iii) in respect of which the Bidderholds an option to purchase; and(iv) in respect of which any Personacting in concert with the Bidderholds an option to purchase;(d) all material conditions (including normal conditions relating to acceptances, listing and increase of capital) to which the Bidor the posting of it is to be subject; and(e) details of any arrangement which exists with any Bidder, with the Targetor with any Personacting in concert with the Bidderor with the Targetin relation to relevant Shares, whether or not any dealings have taken place.
Biddermust not:(a) make an announcement of a firm intention to make a Bid; or(b) take any action which would give rise to the requirement to make such an announcement;
Bidderand its financial adviser have proper grounds for believing that the Bidderis and will continue to be able to implement the Bid.
TKO 2.4.5 TKO 2.4.5
The announcement of a firm intention to make a
Bidcontaining a whole or partial cash consideration must include confirmation by the financial adviser or by another appropriate third party that resources are available to the Biddersufficient to satisfy full acceptance of the Bid.
TKO 2.4.5 Guidance
DFSAtakes the view that the Personconfirming 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.
TKO 2.4.6 TKO 2.4.6
When there has been an announcement of a firm intention to make a
Bid, the Biddermust proceed with the Bidunless the Bidis subject to the prior fulfilment of a previously disclosed specific condition and that condition has not been fulfilled.
TKO 2.5 TKO 2.5 Announcements in other circumstances
Where an acquisition of
Target Sharesby a Bidderor any Personacting in concert with it gives rise to obligations under:(a) TKO Rule 3.1.1 (acquisitions before a Bid Period), or(b) the Rulesin TKO Chapter 4 ( Mandatory Bid); or(c) TKO Rule 5.2.1 (requirement for a Bidin cash),
an appropriate announcement must be made immediately after such an acquisition.
Whenever practicable, the announcement must also state the number of
Sharesacquired and the consideration paid.
TKO 2.6 TKO 2.6 Mode of publication of an announcement
TKO 2.6.1 TKO 2.6.1
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.
TKO 2.7 TKO 2.7 Governing bodies to obtain independent advice
TKO 2.7 Guidance1. TKO Rule 2.7.1 and TKO Rule 2.7.2 require the
Target'sadviser to have a sufficient degree of independence from the Targetto ensure the advice given is properly objective. In certain circumstances it may not be appropriate for a Personwho has had a recent advisory relationship with a Bidderto give advice to a Target. Additionally, the DFSAwould consider a Personwho has a significant interest in or financial connection with either a Bidderor the Targetof such a kind as to create a conflict of interest.2. The requirement for competent independent advice is of particular importance where the Bidis 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. The DFSAshould be consulted if there is any potential of a contravention of these Rules TKO 2.7.1 and TKO 2.7.2. The DFSAmay waive or modify the application of the Rulesif it is satisfied that circumstances are appropriate. See TKO Chapter 16 of these Rules.
TKO 2.7.1 TKO 2.7.1
Governing Bodyof a Biddermust:(a) obtain competent independent advice on any Bidwhen the Bidbeing made is a reverse Takeoveror when the Directorsare 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 the Bid.
TKO 2.7.1 Guidance
Governing Bodyof a Bidderis required to obtain competent independent advice, it should do so before announcing its Bidor any revised Bid. Such advice should be as to whether or not the making of the Bidis in the interests of the Bidder'sshareholders. Shareholders should have sufficient time to consider advice given to them prior to any general meeting held to implement the proposed Bid.
TKO 2.7.2 TKO 2.7.2
Governing Bodyof a Targetmust:(a) obtain competent independent advice on any Bidincluding 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 the Bid.
TKO 2.7.2 Guidance
In obtaining advice as to how a
Bidaffects 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 the Target Circular. See Sections TKO 8.1 and TKO 8.2 of the Rules.
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(a) within the six month period prior to the commencement of the
Bid Period; or(b) during the period, if any, between the commencement of the Bid Periodand an announcement made by the Bidderin accordance with TKO Section 2.4;
Bidto the shareholders of the same class must not be on less favourable terms.
TKO 3.2 TKO 3.2 Acquisitions during a bid period
If, after the commencement of the
Bid Periodand before the Bidcloses for acceptance, a Bidderor any Personacting in concert with it acquires relevant Sharesin the Targetat above the Bidprice (being the then current Bidprice), the Biddermust revise its Bidto not less than the highest price paid for the Sharesso acquired.
TKO 3.2.2 TKO 3.2.2
Immediately after the acquisition, the
Biddermust make an announcement that a revised Bidwill be made in accordance with TKO Rule 3.2.1.
The announcement must also state the number of
Sharesacquired and the price paid.
TKO 3.3 TKO 3.3 Restrictions on the sale of shares during a bid period
TKO 3.3.1 TKO 3.3.1
Bid Period, the Bidderand Personsacting in concert with it must not sell any Securitiesin the Target.
TKO 3.3.1 Guidance1. As a matter of course, the
DFSAwill not waive the requirements under TKO Rule 3.3.1 for sales where a Mandatory Bidunder TKO Chapter 4 is being made.2. Where the DFSAgrants 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 the Biddernor Personsacting in concert with it may make further purchases.
TKO 3.4 TKO 3.4 Disclosure of dealings during a bid period
TKO 3.4.1 TKO 3.4.1
Dealings in relevant
Securitiesduring a Bid Periodby the Bidderor the Target, and by any Personacting in concert, for:(a) their or his own account; or(b) the account of clients;
must be disclosed forthwith by the
Personconcerned:(c) to the DFSA; and(d) in the same manner as a market disclosure required under Rule 4.7.1 of the Markets Rules.
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, the DFSAwill treat them as a single person for the purpose of this Rule.
Disclosure of dealings in relevant
Securitiesof a Bidderis only required following:(a) an announcement of a Securities Exchange Bid; or(b) an earlier commencement of a Bid Periodif it has not been announced that any Bidis likely to be solely in cash.
A disclosure pursuant to TKO Rule 3.4.1 must, at least:(a) provide the total number of the relevant
Securitiespurchased or sold;(b) provide the total number of the respective dealings for the Person'sown account and for the account of clients;(c) detail the prices paid or received;(d) identify the Persondealing.
TKO 3.4.4 TKO 3.4.4
For the purpose of the
Rulesin this Section, "relevant Securities" include:(a) Securitiesof the Targetwhich are subject to a Bidor which carry voting rights;(b) equity Sharecapital of the Bidderand the Target;(c) Securitiesof a Bidderwhich carry substantially the same rights as any to be issued as consideration for a Bid;(d) Securitiesof Bidderand the Targetcarrying 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.
TKO 3.4.4 Guidance
In the case of investment accounts managed on a discretionary basis, relevant
Securitiesor Sharesso managed will be treated, for the purpose of this Rule, as controlled by that manager and not by the Personon whose behalf the relevant Securitiesor Sharesare managed.
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) any
Personacquires, whether by a series of transactions over a period of time or not, Shareswhich carry 30% or more of the voting rights of a Reporting Entity;(b) two or more Personsare acting in concert, and they collectively hold Shareswhich carry less than 30% of the voting rights of a Reporting Entity, and any one or more of them acquires Sharesand such acquisition has the effect of increasing to 30% or more their collective holding of Sharescarrying voting rights of the Reporting Entity;(c) any Personholds not less than 30% of Sharescarrying voting rights of a Reporting Entityand such Personacquires additional Sharesand such acquisition has the effect of increasing that person's holding of Sharescarrying voting rights by more than 3% from the lowest percentage holding of that Personin the 12 month period ending on and inclusive of the date of the relevant acquisition; or(d) two or more Personsare acting in concert, and they collectively hold not less than 30% of Sharescarrying voting rights of a Reporting Entity, and any one or more of them acquires additional Sharesand such acquisition has the effect of increasing their collective holding of Sharescarrying voting rights by more than 3% from the lowest percentage holding of such Personsin the 12 month period ending on and inclusive of the date of the relevant acquisition;
Personmust extend Bidsunder these Rulesto the holders of any class of equity Sharecapital, whether voting or non-voting, and also to the holders of any class of voting non-equity Sharecapital of which such Person, or Personsacting in concert with him, hold Shares.
TKO 4.1.1 Guidance1. Under Article 9 of the Markets Law 2012 the
DFSAmay waive or modify the application of the Markets Law 2012 or of the Rules.2. Where an obligation to make a Mandatory Bidarises as a consequence of Personsacting in concert, the DFSAshould be consulted at the earliest opportunity to determine, where appropriate, which Personor Personsshould mount the Bidand consequently whether any waiver or modification from this Ruleis appropriate. The DFSAmay, for example, require the Bidto be made by the Personwho acquired the shares which triggered the obligation under TKO Rule 4.1.1 to make the Mandatory 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 a Bidto be made even when no single Personin a group acting in concert holds 30% or more of the voting rights.4. Where a Personacquires shares independently from other shareholders, and subsequently groups together with other shareholders to co-operate or to consolidate control of a Reporting Entity, and their existing shareholdings amount to 30% or more of the voting rights in the Reporting Entity, the DFSAwould not normally require a Bidto be made under TKO Rule 4.1.1. However, having once joined together, TKO Rule 4.1.1 may apply. For example, a Mandatory Bidmay 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. The DFSAwill 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 the DFSA'sdiscretion, 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.
TKO 4.1.2 TKO 4.1.2
TKO Rule 4.1.1 does not apply in relation to an acquisition of
Sharesof a Reporting Entitywhich is the result of:(a) exercise of a right conferred by law of a minority shareholder to have his shareholding compulsorily acquired by a Bidder; or(b) exercise of a right conferred by law of a Bidderto compulsorily acquire the shareholding of a minority shareholder.
TKO 4.1.2 Guidance1. 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
Bidsfor different classes of equity Sharecapital must be fair and appropriate, having regard to current circumstances, and the DFSAmust be consulted in advance in such cases.
TKO 4.1.3 Guidance1. The
DFSAmay waive or modify the application of the Rulesif it is satisfied that circumstances are appropriate. See TKO Chapter 16 of these Rules.2. When the issue of new Sharesas consideration for an acquisition or a cash subscription would otherwise result in an obligation to make a Mandatory Bidunder the Rulesin this TKO Chapter 4, the DFSAwill 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 a Mandatory Bidwill 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 of Shares. The DFSAmay in its discretion grant a dispensation in cases where an underwriter incurs an obligation under these Rulesunexpectedly, 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 this Guidance, 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 the Reporting Entity, the issue of new Sharesis made conditional upon the prior approval of a majority of votes of shareholders independent of the transaction:a. the DFSAwill not normally dispense with an obligation under this Section if the Personto whom the new Sharesare to be issued or any Personsacting in concert with him have acquired relevant Sharesin the Targetin the 12 months prior to the posting of the Bid Documentbut subsequent to negotiations, discussions or the reaching of understandings or agreements with the Directorsof the Targetin relation to the proposed issue of new Shares;b. a waiver by independent votes shall be invalidated if any acquisitions are made in the period between the posting of the Bid Documentto the shareholders and the meeting.4. The DFSAmay dispense with the requirement of a Mandatory Bidwhere the approval of independent votes to the transfer of existing Sharesfrom one holder to another is obtained.
TKO 4.2 TKO 4.2 Conditions and consents
Mandatory Bidmade under these Rulesmust be conditional only upon the Bidderhaving received acceptances in respect of Shareswhich, together with Sharesacquired or agreed to be acquired before or during the Bid, will result in the Bidderand any Personacting in concert with it holding Sharescarrying more than 50% of the voting rights.
TKO 4.2.2 TKO 4.2.2
No acquisition of
Shareswhich would give rise to a requirement for a Mandatory Bidunder these Rulesmay be made if the making or implementation of such Bidwould or might be dependent on the passing of a resolution at any meeting of shareholders of the Bidderor upon any other conditions, consents or arrangements.
TKO 4.3 TKO 4.3 Consideration to be offered
TKO 4.3.1 TKO 4.3.1
Mandatory Bidsmade under these Rulesmust, in respect of each class of Sharesinvolved, be in cash or be accompanied by a cash alternative at not less than the highest price paid by the Bidderor any Personacting in concert with it for Sharesof that class during the Bid Periodand within the preceding six months.
TKO 4.3.1 Guidance1. If the
Bidderconsiders that the highest price should not apply in a particular case, the Biddershould consult the DFSA. The DFSAmay waive or modify the application of TKO Rule 4.3.1 if it is satisfied that circumstances are appropriate to provide a dispensation from this Rule. See TKO Chapter 16 of these Rules. Factors that the DFSAmay take into account include the size or timing of the relevant acquisitions, the attitude of the Governing Boardof the Target, whether Shareshad been purchased at high prices from Directorsor other Personsclosely connected with the Bidderor Target, and the number of Sharespurchased in the preceding six months.2. The DFSAshould be consulted where there is more than one class of Sharesinvolved.3. Also note related provisions, TKO Rule 3.1.1 (acquisitions before a Bid Period) and TKO Rule 5.2.1 (requirement for a Bidin cash).
TKO 4.3.2 TKO 4.3.2
Bidor any cash alternative must remain open after the Bidhas become or is declared unconditional as to acceptances for not less than 14 days after the date on which it would otherwise have expired.
TKO 4.3.2 Guidance
See also TKO Rule 11.2.2.
TKO 4.4 TKO 4.4 Obligations of directors selling shares
Directorof a Reporting Entitysells Sharesowned or controlled by him in that Reporting Entityto an identifiable purchaser as a result of which the purchaser is required to make a Bidunder the Rulesin this Chapter, such Directormust stipulate as a condition of the sale that the purchaser undertakes to fulfil his obligations under the Rules.
In addition, such
Directormust not resign from the Governing Bodyuntil the first closing date of the Bidor the date upon which the Bidbecomes or is declared unconditional, whichever is the later.
TKO 4.5 TKO 4.5 Restrictions on exercise of control by a bidder
No nominee of a
Bidderor Personsacting in concert with it may be appointed to the Governing Bodyof the Target, nor may a Bidderand Personsacting in concert with it exercise the votes attaching to any Sharesheld in the Target, until the Bid Documenthas been posted.
TKO 5 TKO 5 The Terms of a Voluntary Bid
TKO 5.1 TKO 5.1 The acceptance condition
It must be the condition of any
Bidfor voting equity Sharecapital which, if accepted in full, would result in the Bidderholding Sharescarrying over 50% of the voting rights of the Target, that the Bidwill not become or be declared unconditional as to acceptances unless the Bidderhas acquired or agreed to acquire (either pursuant to the Bidor otherwise) Sharescarrying over 50% of the voting rights attributable to:(a) the equity Sharecapital alone; and(b) the equity Sharecapital and the non-equity Sharecapital combined.
TKO 5.2 TKO 5.2 Requirement for a bid in cash
TKO 5.2.1 TKO 5.2.1
Sharesof any class under Bidin the Targetacquired for cash by a Bidderor any Personacting in concert with it during the Bid 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, the Bidfor that class must be in cash or accompanied by a cash alternative at not less than the highest price paid by the Bidderor any Personacting in concert with it for Sharesof that class during the Bid Periodor within six months prior to its commencement.
TKO 5.2.1 Guidance1. The
DFSAmay waive or modify the application of TKO Rule 5.2.1 if it is satisfied that circumstances are appropriate. For example, if the Bidderconsiders that the highest price ought not to apply in a particular case, it must consult the DFSA, which may grant a waiver or modification to reflect an adjusted price. See TKO Chapter 16 of these Rules.2. Also note related provisions TKO Rule 3.1.1 (acquisitions before a Bid Period) and TKO Rule 4.3.1 (consideration to be offered in a Mandatory Bid).
TKO 5.3 TKO 5.3 Subjective conditions
TKO 5.3.1 TKO 5.3.1
Subject to prior consent of the
DFSA, a Bidshall not be subject to conditions which depend solely on subjective judgements by the Directorsof the Bidderor the fulfilment of which is in their hands.
TKO 5.3.1 Guidance1. The
DFSAmay 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 the Bidder. Consent would also normally be granted where an announcement for a Bidis to be expressed as being conditional on statements or estimates being appropriately verified.2. A Biddershould not invoke any condition, other than the acceptance condition, so as to cause the Bidto lapse unless the circumstances which give rise to the right to invoke the condition are of material significance to the Bidderin the context of the Bid.3. Conditions that depend solely on a force majeure are not prohibited by this Rule.
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
Targethas more than one class of Sharesas its capital, the Biddermust:(a) make a fair and appropriate Bid, having regard to current circumstances, for each class whether such capital carries voting rights or not;(b) consult the DFSAin advance of such a Bidbeing made; and(c) ensure that a Bidfor non-voting Sharesis not conditional on any particular level of acceptances in respect of that class unless the Bidfor the voting Sharesis also conditional on the success of the Bidfor the non-voting Shares.
TKO 6.1.1 Guidance
A fair and appropriate
Bidneed not necessarily be an identical Bid.
Classes of non-equity
Sharecapital need not be the subject of a Bid, except in the circumstances referred to in TKO Rule 4.1.1.
Bidis made for more than one class of Shares, separate Bidsmust be made for each class.
TKO 6.2 TKO 6.2 Appropriate bid for options, convertibles and rights
Bidis made for Sharesand the Targethas:(a) issued options conferring a right to acquire Shares;(b) issued Convertiblesconferring a right to convert a Securityinto Shares; or(c) issued subscription rights conferring a right to subscribe for Shares;
which remain outstanding, the
Biddermust make a Bidor proposal to the holders of each such category of options, Convertiblesor subscription rights.
Bidor 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.
TKO 6.3 TKO 6.3 Special deals with favourable conditions
TKO 6.3.1 TKO 6.3.1
Bidderor Personsacting in concert with it must not make any arrangements with shareholders and must not deal or enter into arrangements to deal in Sharesof the Target, or enter into arrangements which involve acceptance of a Bid, either during a Bidor when one is reasonably in contemplation, if there are favourable conditions attached which are not being extended to all shareholders.
TKO 6.4 TKO 6.4 Announcement of acceptance levels
By 9:00am (Dubai time) at the latest on the business day following the day on which a
Bidis due to expire, or becomes or is declared unconditional as to acceptances, or is extended, the Biddermust 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.
TKO 6.4.2 TKO 6.4.2
The announcement must state the total numbers of
Sharesand rights over Shares(as nearly as practicable);(a) for which acceptances of the Bidhave been received;(b) held before the Bid Period; and(c) acquired or agreed to be acquired during the Bid Period;
and must specify the percentages of the relevant classes of
Sharesrepresented by these numbers.
TKO 6.4.2 Guidance1. See also TKO Rule 126.96.36.199. If, during a
Bid, any statements are made by a Bidderor its advisers about the level of acceptances of the Bidor the number or percentages of shareholders who have accepted the Bid, an immediate announcement must be made in conformity with these Rules.3. If a Bidderfails within the time limit to comply with the requirements in this Section, the DFSAor Authorised Market Institution(as appropriate) may consider a temporary suspension of listing of the Target's Sharesand, where appropriate, the Bidder's Sharesuntil the relevant information is given.
TKO 6.5 TKO 6.5 Use of proxies and authorities in relation to acceptances
Biddermust not require the shareholders of the Target, as a term of his acceptance of a Bid, to appoint a proxy to vote in respect of those Sharesor to appoint a particular Personto exercise any other rights or take any other action in relation to those Sharesunless the appointment is on the following terms, which must be set out in the Bid Document:(a) the proxy may not vote, the rights may not be exercised and no other action may be taken unless the Bidis wholly unconditional or, in the case of voting by the proxy, the Bidwill 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 the Bid;(c) the appointment ceases to be valid if the acceptance is withdrawn; and(d) the appointment applies only to Sharesin respect of which there is an acceptance of the Bid.
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
Bidderand the Target, respectively, must ensure that each document or advertisement issued, or statement made, by them or on their behalf during the course of a Bid:(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.
TKO 7.1.1 Guidance1. This
Ruleapplies whether the document, advertisement or information is issued directly by the Bidderor Targetor 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 the Rules. 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.
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 the Directorsof the Bidderand/or, where appropriate, the Target, 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.
If it is proposed that any
Directorshall 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.
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 the DFSA.
TKO 7.2.1 Guidance
The time of filing of
Bid Documentsand Target Circularswith the DFSAis addressed in TKO Section 11.1.
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
TKO 7.3 TKO 7.3 Equality of information
Subject to TKO Rule 7.3.2, information about entities involved in a
Bidmust be made equally available to all shareholders as nearly as possible at the same time and in the same manner.
TKO Rule 7.3.1 does not apply to:(a) the furnishing of information in confidence by a
Targetto a bona fide potential Bidderor vice versa; or(b) the issue of circulars to their own investment clients by brokers or advisers to any party to the transaction.
Any information, including particulars of shareholders, given to one
Bidderor potential Bidder, must, on request, be furnished equally and as promptly to another Bidderor bona fide potential Bidder, even if that other Bidderis less welcome.
Bidor potential Bidis for a management buy-out or similar transaction, the Bidderor potential Biddermust, on request, forthwith furnish the independent Directorsof the Targetor its advisers with all information which has been furnished by the Bidderor potential Bidderto external providers or potential providers of finance (whether equity or debt) for the buy-out.
TKO 7.4 TKO 7.4 Restrictions on frustrating action
During the course of a
Bid, or even before the date of the Bidif the Governing Bodyof the Targethas reason to believe that a bona fide Bidmight be imminent, the Governing Bodymust 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 unissued Shares;(b) issue or grant options in respect of any unissued Shares;(c) create or issue, or permit the creation or issue of, any Securitiescarrying rights of conversion into or subscription for Shares;(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.
The notice convening the general meeting of shareholders must include information about the
Bidor contemplated Bid.
Where it is considered that an obligation or other special circumstance already exists, although a formal contract has not been entered into, the
DFSAmust be consulted and its consent obtained to proceed without a meeting of shareholders.
TKO 8 TKO 8 Documents Issued by Governing Bodies
TKO 8.1 TKO 8.1 The general obligation as to information
Governing Bodiesof the Bidderand Targetmust give sufficient information and advice to the shareholders of the Targetto enable them to reach a properly informed decision as to the merits of a Bid. Such information must be made available to such shareholders early enough to enable them to make a timely and informed decision.
TKO 8.1.2 TKO 8.1.2
Governing Bodiesof Bidderand Targetmust make timely disclosure of all statements, notices, declarations and other documents such as the Bid Documentand the Target Circularin the same manner as a market disclosure under Rule 4.7.1 of the Markets Rules.
TKO 8.2 TKO 8.2 Bid document and target circular disclosures
TKO 8.2.1 TKO 8.2.1
Bid Document, the Biddermust disclose the information specified in TKO App1, together with any other relevant information to enable the Target'sshareholders to reach a properly informed decision.
TKO 8.2.1 Guidance
See also TKO Rule 11.1.1.
TKO 8.2.2 TKO 8.2.2
Governing Bodyof the Targetmust circulate its views on the Bid, including any alternative Bids, to its shareholders in a Target Circular.
TKO 8.2.2 Guidance
Nothing in these
Rulesprecludes a Bidderand a Targetissuing a joint document under which they comply with their respective obligations.
TKO 8.2.3 TKO 8.2.3
In its initial
Target Circular, the Governing Bodyof the Targetmust disclose the information specified in TKO App2 (whether recommending acceptance or rejection of the Bid), together with any other information it considers to be relevant to enable its shareholders to reach a properly informed decision on the Bid.
TKO 8.2.3 Guidance
See also TKO Rule 11.1.2.
TKO 8.3 TKO 8.3 Documents subsequently sent to shareholders
Documents subsequently sent to shareholders of the
Targetby either the Bidderor Targetduring the Bid Periodmust contain the information specified in TKO App3.
TKO 8.4 TKO 8.4 Availability of documents for inspection
Bidderor Target:(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 its Bid Documentor Target Circular;
Bidderor Targetrespectively must make any such document available for inspection from the time the Bid Documentor Target Circular, as appropriate, is published until the end of the Bid Period. The Bid Documentor Target Circularmust state which documents are so available and the place in the DIFCwhere inspection can be made.
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 a
Bidor any arrangement, undertaking or agreement relating to the commitment to accept a Bidor to the circumstances in which the Biddermay or may not invoke or seek to invoke a condition to its Bid.(d) The memorandum and articles of association of the Target, and where there is a Securities Exchange Bid, also of the Bidder.(e) The annual financial statements of the Target, and, where there is a Securities Exchange Bid, also the Bidderfor 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 the Bid Documentor Target Circular.
TKO 9 TKO 9 Profit Forecasts
TKO 9.1 TKO 9.1 References to profit forecasts
A reference in this TKO Section 9 to:(a) a "profit forecast" includes a forecast of loss; and(b) a "profit" includes a loss.
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
Bidderor Targetto shareholders, the Directorsof the respective Bidderor Target:(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.
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
TKO 9.3 TKO 9.3 Assumptions
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 the Directorshave based their profit forecast, must be stated and explained in the document.
When, after a
Bid Documenthas 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.
TKO 9.4 TKO 9.4 Reports in connection with profit forecasts
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.
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
Ruledoes not apply where the income is virtually certain, for example, known rents receivable under existing leases.
TKO 9.4.3 TKO 9.4.3
Any relevant profit forecast which has been made before the commencement of the
Bid Periodmust be examined, repeated and reported on in the document sent to shareholders.
TKO 9.4.3 Guidance
DFSAmay waive or modify the application of TKO Rule 9.3.3 if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of these Rules. In exceptional circumstances, the DFSAmay accept that, because of the uncertainties involved, it is not possible for a forecast previously made to be reported on in accordance with the Rulesnor for a revised forecast to be made. In these circumstances, shareholders must be given a full explanation of why the requirements of the Rulesare not capable of being met.
Bid Documenthas 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.
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 a
Bid Period, excepting unaudited statements of annual or interim results which have already been published.
TKO 9.5.1 Guidance1. When no figure is mentioned, or even if the word "profit" is not used, the
DFSAmay 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 the DFSAas a profit forecast which must be reported on in accordance with this Rule. In cases of doubt the DFSAmust 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.
TKO 9.6 TKO 9.6 Miscellaneous rules relating to forecasts
Bidderor Targetincludes a forecast in a document, any document subsequently sent out by that entity in connection with that Bidmust contain a statement by the Directorsthat:(a) the forecast remains valid for the purpose of the Bid; and(b) the accountants and others who reported on the forecast have indicated that they have no objection to their reports continuing to apply.
When a forecast of profit before taxation appears in a document addressed to shareholders, it must be accompanied by a forecast of earnings per
Sharearising from the profit.
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.
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.
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
Personprovides a valuation of assets in connection with a Bid, the Personmust ensure that the valuation is supported by the opinion of an appropriate external and independent valuer.
TKO 10.1.1 Guidance1. 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. This
Ruledoes not apply to an assessment of value carried out merely for the purpose of preparation of financial accounts.
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.
TKO 10.1.3 TKO 10.1.3
If a statement according with TKO Rule 10.1.2 cannot be made, the
Personmust ensure that the valuation is updated.
TKO 10.1.3 Guidance1. In certain cases,
Bid Documentsand Target Circularsissued by the Bidderor the Targetwill include statements of assets reproducing Directors'estimates of asset values published with the entity's accounts. The DFSAwill not regard such estimates as "given in connection with a Bid" except where asset values are a particularly significant factor in assessing the Bidand 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, certain Reporting Entities, in particular property companies, which are the subject of an unexpected Bidmay 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 the Target Circularhas to be sent out. In such cases, the DFSAmay waive strict compliance with this requirement. The DFSAwill 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. Targetsor their advisers who wish to make use of this procedure should consult the DFSAat the earliest opportunity.
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.
TKO 10.2.1 Guidance
DFSAis 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, the DFSAmay require any of these documents to be reproduced in full in a document sent to shareholders.
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
Biddermust:(a) post the Bid Documentto shareholders within 21 days of its announcement of a firm intention to make a Bid; and(b) give prior notice to the DFSAby filing a copy of the Bid Documentwith the DFSAat least 1 day prior to such posting.
TKO 11.1.1 Guidance1. The
DFSAmust be consulted if it is considered inappropriate or unlikely that the Bid Documentis posted within this period and may, in considering any appropriate waiver or modification, require that interest for the period of delay be included in the Bid.2. The DFSAwill not consider the merits of the Bid. It should not be assumed that because of this prior notification, the DFSAwill not use powers available to it where the need for remedial action is subsequently identified.3. The DFSAexpects that the Bid Documentwill be posted within 21 days of the announcement of a firm intention to make a Bidunless the bid is subject to regulatory pre-conditions of a type acceptable to the DFSA. Such regulatory pre-conditions, if acceptable to the DFSAmay 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 the Bid Document.
TKO 11.1.2 TKO 11.1.2
Governing Bodyof the Targetmust:(a) advise the Target'sshareholders of its views on the Bidby posting a Target Circularto the shareholders within 21 days of publication of the Bid Document; and(b) give prior notice to the DFSAby filing a copy of the Target Circularwith the DFSAat least 1 day prior to such posting.
TKO 11.1.2 Guidance2. The
DFSAwill not consider the merits of the response to the Bid. It should not be assumed that because of this prior notification, the DFSAwill not use powers available to it where the need for remedial action is subsequently identified.
TKO 11.2 TKO 11.2 Closing dates and extensions
Biddermust ensure that its Bidremains open for at least 35 days following the date on which the Bid Documentis posted.
TKO 11.2.2 TKO 11.2.2
Bidderannounces an extension of a Bid, either the next closing date must be stated or, if the Bidis unconditional as to acceptances, a statement may be made that the Bidwill remain open until further notice. In the latter case, at least 14 days' notice in writing must be given, before the Bidis closed, to those shareholders who have not accepted.
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.
Bidhas become or is declared unconditional as to acceptances, the Biddermust ensure that its Bidremains open for acceptance for not less than 14 days after the date on which it would otherwise have expired. When, however, a Bidis unconditional as to acceptances from the outset, a 14 day extension is not required but the Biddermust clearly and prominently set out the position in the Bid Document.
TKO 11.2.4 TKO 11.2.4
Biddermust comply with any firm statement made by it as to the duration of its Bid.
TKO 11.2.4 Guidance
If statements in relation to the duration of a
Bidsuch as "the Bidwill 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 the Target, or are made by or on behalf of a Bidder, its Directors, officials or advisers, and not withdrawn immediately if incorrect, then only in exceptional circumstances will the DFSAallow a Biddersubsequently to extend its Bidbeyond the stated date except where the right to do so has been specifically reserved.
TKO 11.2.5 TKO 11.2.5
Biddermust not allow or declare its Bid(whether revised or not) to become unconditional as to acceptances after midnight (Dubai time) on the 67th day after the day the initial Bid Documentwas posted.
TKO 11.2.5 Guidance
DFSAmay waive or modify the application of these Rulesif it is satisfied that circumstances are appropriate. See TKO Chapter 16 of these Rules. Note that a waiver of TKO Rule 11.2.5 will normally only be granted:a. if a competing Bidhas been announced (in which case both Bidderswill normally be bound by the time-table established by the posting of the competing Bid Document); orb. if the Governing Bodyof the Targetconsents to an extension.
On the 67th day after the day upon which the initial
Bid Documentwas posted (or any other date beyond which the Bidderhas stated that its Bidwill not be extended) the Biddermust make an announcement by 5.00pm (Dubai time) as to whether the Bidis unconditional as to acceptances or has lapsed.
All conditions must be fulfilled or the
Bidwill lapse within 21 days of:(a) the first closing date; or(b) the date on which the Bidbecomes unconditional as to acceptances;
whichever is the later.
TKO 11.2.8 TKO 11.2.8
Governing Bodyof the Targetproposes to announce any material new information after the 46th day following the posting of the Bid Document, it must consult the DFSAin advance of making any such announcement.
TKO 11.2.8 Guidance1. The
DFSAshould be consulted in good time. This Ruledoes 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 the Target, every effort should be made to bring forward the date of the announcement.3. If an announcement of the kind referred to in this Ruleis made after the 46th day, the DFSAwill 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.
TKO 11.3 TKO 11.3 Settlement of consideration
The consideration must be paid within 14 days of the date of the
Bidbecoming or being declared unconditional and acceptance thereof, whichever is the later.
TKO 11.4 TKO 11.4 Revision of bids
TKO 11.4.1 TKO 11.4.1
Biddermust ensure that its Bid, if revised, is kept open for at least 14 days following the date on which the revised Bid Documentis posted.
TKO 11.4.1 Guidance1. No document revising the
Bidmay therefore be posted within the 14 days ending on the last day the Bidmay 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 "the Bidwill not be further increased" or "our Bidremains at x cents per Shareand it will not be raised" ("no increase statements") are included in documents sent to Targetshareholders, or are made by or on behalf of a Bidder, its Directors, officials or advisers, and not withdrawn immediately if incorrect, then only in exceptional circumstances will the DFSApermit the Bidderto subsequently amend the terms of its Bidin any way, even if the amendment would not result in an increase of the value of the Bid, except where the right to do so has been specifically reserved.
Bidis revised, all shareholders who accepted the original Bidmust be entitled to the revised consideration.
Biddermay introduce new conditions only to the extent necessary to implement an increased or improved Bid.
TKO 11.5 TKO 11.5 Alternative bids
TKO 11.5.2 TKO 11.5.2
Where a firm statement has been made that an alternative
Bidwill not be extended or reintroduced and that that alternative Bidhas 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 alternative Bidhas closed for acceptance, a Bidderis not precluded from reintroducing that alternative at a later date.
TKO 11.5.2 Guidance
Reintroduction would constitute a revision of the
Bidand would, therefore, be subject to the requirements of, and only be permitted as provided in, the Rulesin TKO Section 11.4.
TKO 11.6 TKO 11.6 Withdrawal of acceptances
A shareholder of the
Targetwho has accepted the Bidmay withdraw his acceptance:(a) from the date which is 14 days after the first closing date of the initial Bid, if the Bidhas not by such date become or been declared unconditional as to acceptances; and(b) no later than the time that the Bidbecomes or is declared unconditional as to acceptances.
TKO 12 TKO 12 Restrictions Following Bids
TKO 12.1 TKO 12.1 Delay of twelve months
Bidhas been announced or posted but has not become or been declared unconditional and has been withdrawn or has lapsed, neither the Bidder, nor any Personwho acted in concert with the Bidderin the course of the original Bid, nor any Personwho is subsequently acting in concert with any of them, may within 12 months from the date on which such Bidis withdrawn or lapses either:(a) make a Bidfor the relevant Sharesof the Target(including a partial Bidwhich could result in the Bidderholding Sharescarrying 30% or more of the voting rights of the Target); or(b) acquire any Sharesof the Targetif the Bidderor any such Personwould thereby become obliged under TKO Chapter 4 to make a Bid;(c) acquire any Sharesof the Targetor any rights over such Sharesif the Sharesand rights over Sharesheld by any such Person, together with Personsacting in concert with him, would in aggregate carry 30% or more of the voting rights of the Target.
The restrictions in TKO Rule 12.1.1 also apply following a partial
Bidwhich could result in a holding of not less than the 30% and not more than 50% of the voting rights of the Targetwhether or not the Bidhas become or been declared unconditional. When such a Bidhas become or been declared unconditional, the period of 12 months runs from that date.
TKO 13 TKO 13 Partial Bids
TKO 13.1 TKO 13.1 Application of this chapter
The provisions of this TKO Chapter 13 apply to partial
TKO 13.2 TKO 13.2 DFSA consent required
TKO 13.2.1 TKO 13.2.1
Biddermust obtain the DFSA'sprior consent for any partial Bid.
TKO 13.2.1 Guidance1. Consent will normally be granted under TKO Rule 13.2.1 where a
Bidcould not result in the Bidderholding Sharescarrying 30% or more of the voting rights of a Target.2. In the case of a Bidwhich could result in the Bidderholding Sharescarrying 30% or more but less than 100% of the voting rights of a Target, such consent will not normally be granted if the Bidderor Personsacting in concert with it have acquired, selectively or in significant numbers, Sharesin the Targetduring the 12 months preceding the application for consent or if Shareshave been purchased at any time after the partial Bidwas reasonably in contemplation.
TKO 13.3 TKO 13.3 Restrictions and requirements
Bidderand Personsacting in concert with it must not purchase Sharesin the Targetduring the Bid Period.
In the case of a successful partial
Bid, neither the Bidder, nor any Personwho acted in concert with the Bidderin the course of the partial Bid, nor any Personwho is subsequently acting in concert with any of them, may purchase such Sharesduring a period of 12 months after the end of the Bid Period.
Bidis made which may result in the Bidderholding Sharescarrying not less than 30% and not more than 50% of the voting rights of a Target, the Biddermust:(a) state the precise number of Sharessought to be acquired; and(b) ensure that the Bidis not declared unconditional as to acceptances unless acceptances are received for not less than that number.
TKO 13.3.4 TKO 13.3.4
Biddermust ensure that any Bidwhich could result in the Bidderholding Sharescarrying 30% or more of the voting rights of a Targetis conditional on:(a) a specified number of acceptances being received, and(b) approval of the Bidbeing given by shareholders holding over 50% of the voting rights not held by the Bidderand Personsacting in concert with it.
TKO 13.3.4 Guidance1. 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 the
Targetare held by one shareholder.
In making a partial
Bid, the Biddermust:(a) make the Bidto 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 that Sharestendered in excess of this percentage are accepted by the Bidderfrom each shareholder in the same proportion to the number tendered to the extent necessary to enable it to obtain the total number of Shareswhich it has sought to acquire.
TKO 13.3.6 TKO 13.3.6
Bidis made for a Targetwith more than one class of equity Sharecapital which may result in the Bidderholding Sharescarrying 30% or more of the voting rights, Bidsfor each class must be fair and appropriate.
TKO 13.3.6 Guidance
DFSAshould be consulted in advance of any such case.
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
Reporting Entityredeems or acquires its own voting Shares, 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 the Rulesin TKO Chapter 4.
TKO 14.1.1 Guidance1. The
DFSAshould be consulted in advance in any case where this Rulemay become relevant. In appropriate circumstances the DFSAmay waive any resulting obligation to make a general Bidif 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, the DFSAmay in appropriate circumstances require that at the relevant meetings the majority votes must be excluded.
TKO 14.1.2 TKO 14.1.2
Where an obligation to extend a
Bidarises as a consequence of application of TKO Rule 14.1.1, then, for the purposes of these Rules:(a) the Reporting Entityundertaking the redemption or acquisition is deemed to be the Target;(b) where the obligation to extend the Bidarises as a consequence of a shareholder obtaining or consolidating control as a result of the redemption or purchase by the Reporting Entityof its own shares, that shareholder must extend a Bid;(c) where the obligation to extend the Bidarises as a consequence of a group of Personsacting in concert obtaining or consolidating control as a result of the redemption or purchase by the Reporting Entityof its own shares, each such Personmust extend a Bid; and(d) the provisions of these Rulesrelating to disclosure and, where possible, timing and periods of notice will apply with any necessary adaptation to meet that purpose.
TKO 14.1.2 Guidance
Where an obligation to make a
Bidarises as a consequence of Personsacting in concert, the DFSAshould be consulted at the earliest opportunity to determine whether any waiver or modification of this Ruleis appropriate. See also TKO Rule 4.1.1 and accompanying Guidance.
TKO 14.1.3 TKO 14.1.3
Any redemption or acquisition of
Securitiesof the Bidderor Sharesof the Targetmade or to be made in terms of a Bidor any such redemption or acquisition effected within 12 months prior to the commencement of the Bid Periodmust be disclosed in accordance with TKO Section 3.4 and in all relevant Bid Documentsand Target Circulars.
TKO 14.1.3 Guidance
Nothing in this
Rulelimits or displaces any obligation of disclosure that a Bidderor Targetor other Personmay have aside from these Rulesand irrespective of the existence of, or obligation to extend, a Bid.
TKO 14.2 TKO 14.2 Other methods of bid
Bidis implemented by a scheme of arrangement or conversion of Securitiesor any other method, then, for the purposes of these Rules:(a) the DFSAmust be consulted in advance;(b) in the case of a scheme of arrangement, the Reporting Entityin respect of which the scheme is proposed is deemed to be the Target, and the Personswho will be the holders of Sharesof the Reporting Entityafter the scheme of arrangement has been sanctioned are deemed to be the Bidder; and(c) the provisions of these Rulesrelating to disclosure and, where possible, timing and periods of notice will apply with any necessary adaptation to meet that purpose.
TKO 15 TKO 15 [Deleted]
TKO 15.1 TKO 15.1 [Deleted]
TKO 15.1.1 TKO 15.1.1 [Deleted]
TKO 15.1.2 TKO 15.1.2 [Deleted]
TKO 15.1.3 [Deleted]
TKO 15.1.4 [Deleted]
TKO 15.1.5 [Deleted]
TKO 15.2 TKO 15.2 [Deleted]
TKO 15.2.1 [Deleted]
TKO 15.2.2 [Deleted]
TKO 15.2.3 [Deleted]
TKO 15.2.4 TKO 15.2.4 [Deleted]
TKO 16 TKO 16 Waivers or Modifications
TKO 16.1 TKO 16.1 Applications to waive or modify the Markets Law 2012 and rules
Personwishing to seek a waiver or modification of a provision of the Law or Rulesas it applies to him, must:(a) apply in writing to the DFSA;(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).
TKO 16.1.2 TKO 16.1.2
In considering the application, the
DFSAmay:(a) carry out any enquiries which it considers appropriate;(b) require the applicant to provide additional information in such form as the DFSAconsiders appropriate;(c) require any information furnished by the applicant to be verified in such manner as the DFSAmay specify; and(d) take into account any information which it considers appropriate in relation to the application.
TKO 16.1.2 Guidance1. Under Article 9 of the Markets Law 2012 the
DFSAmay waive or modify the application of the Markets Law 2012 or of the Rules.2. The DFSAmay grant a waiver or modification from the application of the Ruleswhere a Takeovertransaction is subject to the dual jurisdiction of the DFSAand a regulator or agency of a jurisdiction other than the DIFC. While applications will be considered on a case by case basis, it should be expected that the factors that the DFSAwill 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 these Rules, DIFCLaw and international best practice;(c) whether the grant of the application is or is not in the interests of the DIFC.
TKO 17 TKO 17 Enforcement
TKO 17.1 TKO 17.1 Applicable provisions
TKO 17.1 Guidance1. The Takeover Rules (including the
Takeover Principlesin 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 the Regulatory Law2004. Those that seek to take advantage of the facilities of the Securitiesmarkets in the DIFCshould conduct themselves in matters relating to Takeovers 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 the DFSAmay apply to the Courtto obtain an order or orders against a Personwho has contravened the Markets Law 2012 or the Rules. These include, by Article 68(1)(e), orders in relation to activities relating to Takeovers. Under Article 70(2), the FMTalso has jurisdiction to make a finding or declaration of unacceptable circumstances and additional orders as it sees fit.
TKO App1 TKO App1 Contents of Bid Documents
TKO A1.1 TKO A1.1 Disclosure as to the bidder and its intentions
Biddermust disclose the following information:(a) the name and address of the Bidder;(b) the name and address of any financial adviser or other person making the Bidon behalf of the Bidder;(c) the identity of any Personsacting in concert with the Bidder;(d) whether or not any Securitiesacquired in pursuance of the Bidwill be transferred to any other Personsand, if so, the names of any such Personsand details of any such agreement, arrangement or understanding;(e) the names of the Directorsof the Bidderand their direct and indirect interests, if any, in the Bidderand Target;(f) the nature and particulars of the business of the Bidderand its financial and trading prospects;(g) the Bidder'sreasons for the Bid;(h) the Bidder'sintentions regarding the continuation of the business of the Target;(i) the Bidder'sintentions regarding any major changes to be introduced in the business of the Target, including any redeployment of the fixed assets of the Target;(j) the Bidder'sintentions with regard to the continued appointment of Directorsand employment of the employees of the Targetand of its subsidiaries.
TKO A1.2 TKO A1.2 Financial Disclosure in Securities Exchange Bid
In the case of a
Securities Exchange Bid, the Biddermust disclose the following information relating to the financial affairs of the Bidder:(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 per Share;(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 the Biddersubsequent 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 the Bidis 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 the Bid Period; and(j) details of any bank overdrafts or loans, or other similar indebtedness, mortgages, charges or guarantees or other material contingent liabilities of the Bidderand any of its subsidiaries, or, if there are no such liabilities, a statement to such effect.
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.
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.
TKO A1.3 TKO A1.3 Disclosure of shareholdings and dealings
Biddermust disclose:(a) the shareholdings of the Bidderin the Target;(b) the holdings of Securitiesin the Bidder(in the case of a Securities Exchange Bidonly) and in the Targetin which each Directorof the Bidderis directly or indirectly interested;(c) the holdings of Securitiesin the Bidder(in the case of a Securities Exchange Bidonly) and in the Targetwhich any Personacting in concert with the Bidderowns or controls, together with the name of such Personacting in concert;(d) the holdings of Securitiesin the Bidder(in the case of a Securities Exchange Bidonly) and in the Targetowned or controlled by any Personwho, prior to the posting of the Bid Document, has irrevocably committed himself to accept the Bid, together with the name of such Person.
If in any of the above categories there are no holdings of
Sharesor Securities, 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.
Personwhose holdings of Sharesor Securitiesare required by this Section to be disclosed has dealt for value in the Sharesin question during the period beginning six months prior to the Bid Periodand ending with the latest practicable date prior to the posting of the Bid Document, the details, including dates and prices, must be stated. If no such dealings have taken place, this fact must be stated.
TKO A1.4 TKO A1.4 Other disclosures
TKO A1.4.1 TKO A1.4.1
Biddermust disclose the following information:(a) the price or other consideration to be paid for the Shares;(b) precise particulars of the Sharesin respect of which the Bidis 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 the Bidand its proposed implementation and the mechanics thereof;(d) all conditions applicable to the Bid;(e) a statement to the effect that settlement of the consideration to which any shareholder is entitled under the Bidwill be implemented in full in accordance with the terms of the Bidwithout regard to any lien, right of set-off, counterclaim or other analogous right to which the Biddermay otherwise be, or claim to be, entitled against such shareholder;(f) particulars of all documents required, and procedures to be followed, for acceptance of the Bid;(g) whether the Bidderintends to avail itself of any powers of compulsory acquisition;(h) in the case of a partial Bid, the reasons for making a partial Bidrather than a full Bid;(i) where the Bidis for cash or includes an element of cash or other assets not comprising Securities, the Bid Documentmust include confirmation by a financial adviser or by an appropriate external and independent Person(for example, the Bidder'sbank) that resources are available to the Biddersufficient to satisfy full acceptance of the Bid;(j) a statement on whether or not any agreement, arrangement or understanding (including any compensation arrangement) exists between the Bidderor any Personacting in concert with it and any of the Directorsof the Targetor Personswho were Directorswithin the preceding 12 months, or shareholders or Personswho were shareholders within the preceding 12 months, having any connection with or dependence upon the Bid;(k) a statement on whether or not any agreement, arrangement or understanding exists between a Bidderand the Targetand Personsacting in concert with them in relation to the Shares;(l) full particulars of any such agreement, arrangement or understanding referred to in (j) and (k); and(m) where the Bidinvolves the issue of unlisted Securities, an estimate of the value of such Securitiesprovided by an external independent adviser, together with the assumptions and methodology used in arriving at that value.
TKO A1.4.1 Guidance1. For the purposes of TKO A1.4.1(i), the
Personconfirming 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. The DFSAmay 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 these Rules. In relation to TKO A1.4.1(e), note that the DFSAwill only grant a waiver or modification in exceptional circumstances and where all shareholders are to be treated equally.
In the case of a
Securities Exchange Bid, the Biddermust 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 the Bidderor any of its subsidiaries during the period beginning two years before the commencement of the Bid Period, including particulars of dates, parties, terms and conditions and any consideration passing to or from the Bidderor any of its subsidiaries;(b) whether and in what manner the emoluments of the Directorsof the Bidderwill be affected by the acquisition of the Targetor by any other associated transaction, or, if there will be no affect, a statement to that effect;(c) details of the authorised and issued Sharecapital and the rights of shareholders in respect of capital, dividends and voting;(d) details of any material litigation to which the Bidderis, or may become, a party; and(e) how and when the documents of title to the Securitieswill be issued.
TKO App2 TKO App2 Contents of Target Circulars
TKO A2.1 TKO A2.1 Disclosure in initial target circular
Governing Bodyof the Targetmust 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 the Bid Documentregarding the Bidder'sintentions in respect of the Targetand its Directorsmade pursuant to TKO A1.1;(c) details of the holdings of Securitiesof the Targetin the Bidder;(d) details of the holdings of Sharesin the Targetand Securitiesin the Bidderin which Directorsof the Targetare directly or indirectly interested;(e) details of the holdings of Sharesin the Targetand (in the case of a Securities Exchange Bidonly) of Securitiesin the Bidderwhich any Personacting in concert with the Targetowns or controls and the holdings of Sharesin the Targetand, (in the case of a Securities Exchange Bidonly) of Securitiesin the Bidder, owned or controlled by a subsidiary of the Target, or by any Personacting in concert with it;(f) details of the holdings of Sharesin the Targetand (in the case of a Securities Exchange Bidonly) of Securitiesin the Bidderowned or controlled by a Personwho has any agreements, arrangements or understandings of the kind referred to in TKO A1.4.1 (j) and (k) with the Targetor with any Personacting in concert with the Target;(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 any Directoror proposed Directorof the Targetwith the entity or any of its subsidiaries, or, if there are none, a statement to that effect; and(i) whether the Directorsof the Targetintend, in respect of their own beneficial holdings of Shares, to accept or reject the Bid.
Personwhose holdings of Sharesor Securitiesare required by TKO A2.1.1 to be disclosed has dealt for value in the Sharesor Securitiesin question during the period beginning six months prior to the Bid Periodand ending with the latest practicable date prior to the posting of the Target Circular, the details, including dates and prices, must be stated. If no such dealings have taken place, that fact must be stated.
TKO A2.2 TKO A2.2 Financial disclosure
Targetmust 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 per Share;(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 the Targetsubsequent 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 the Bid Period; and(i) details of any bank overdrafts or loans, or other similar indebtedness, mortgages, charges or guarantees or other material contingent liabilities of the Targetand any of its subsidiaries, or, if there are no such liabilities, a statement to such effect.
TKO App3 TKO App3 Contents of Subsequent Documents
TKO A3.1 TKO A3.1 Obligation to update material information
Documents subsequently sent to shareholders of the
Targetby either the Bidderor Targetmust contain details of any material changes in information previously published by or on behalf of the relevant Bidderor Targetduring the Bid Period. If there have been no such changes, this must be stated.
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));(d) ultimate owner of Sharesacquired under the Bid(TKO A1.1.1(d));(e) changes to Directors'service contracts (TKO A2.1.1(h)); and(f) agreements, arrangements or understandings in relation to Bids(Rules TKO A1.4.1(j) and (k) and TKO A2.1.1(f) and (g)).
TKO App4 [Deleted]