TKO 4.1.1 Guidance

1. Under Article 9 of the Markets Law 2012 the DFSA may waive or modify the application of the Markets Law 2012 or of the Rules.
2. Where an obligation to make a Mandatory Bid arises as a consequence of Persons acting in concert, the DFSA should be consulted at the earliest opportunity to determine, where appropriate, which Person or Persons should mount the Bid and consequently whether any waiver or modification from this Rule is appropriate. The DFSA may, for example, require the Bid to be made by the Person who 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 Bid to be made even when no single Person in a group acting in concert holds 30% or more of the voting rights.
4. Where a Person acquires 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 DFSA would not normally require a Bid to be made under TKO Rule 4.1.1. However, having once joined together, TKO Rule 4.1.1 may apply. For example, a Mandatory Bid may be required when a member of the group acquires further shares carrying voting rights such that the total of the groups holdings reach 30% or more.
5. The DFSA will entertain an application for waiver or modification relating to the amount of permissible creep under TKO Rule 4.1.1(c) or (d) only in exceptional circumstances. Without in any way limiting the DFSA's discretion, such a circumstance may include where there is a dilution of voting rights by the issue of new shares or otherwise and it is appropriate to net off the dilution against acquisitions.

Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
[Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]