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Regulations Governing Tender Offers for Purchase of the Securities of a Public Company(2005.06.22) |
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Article 2
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"Public Tender Offer" as referred to in these Regulations means purchase of securities from unspecified persons bypassing the centralized securities exchange market or the over-the-counter (OTC) markets, and instead using public announcement, advertisement, radio broadcast, telecommunication, letters, telephone, presentation show, explanation delivering or other methods to make a public offer.
The scope of public tender offers to purchase securities under Paragraph 2 of Article 43-1 of the Act includes purchase of shares, new shares entitlement certificates, warrants, preferred shares attached with warrants, convertible corporate bonds, corporate bonds attached with warrants, depositary receipts, and any other securities approved by the Financial Supervisory Commission (hereinafter "FSC") of a company, which has already completed the public issuance or supplemental public issuance of the above-mentioned securities in accordance with the Act.
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Article 3
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The term "affiliates" as used in Paragraphs 2 and 4 of Article 43-1, Paragraph 1 of Article 43-3, Paragraph 4 of Article 43-5, Subparagraph 4 of Paragraph 1 of Article 174, and Subparagraph 2 of Paragraph 1 of Article 178 of the Act and in these Regulations refers to any of the following:
1. For an Offeror that is a natural person, it refers to his or her spouse and minor children.
2. For an Offeror that is a company, it refers to an affiliated enterprise as defined in Chapter 6-1 of the Company Act.
Securities held by affiliates mentioned in the preceding paragraph include those held using the names of other persons.
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Article 8
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Consideration, other than cash, for public tender offers shall be confined to within the following scope:
1. Domestic securities that are either listed on a stock exchange or traded on an OTC market pursuant to the provisions of the Act; the scope of foreign securities [eligible as consideration] shall be as separately prescribed by the FSC.
2. If the Offeror is a public company, stocks or bonds offered and issued thereby; if the Offeror is a foreign company, the scope of stocks or bonds offered and issued thereby [eligible as consideration] shall be as separately prescribed by the FSC.
3. Other property of an Offeror referred to in the preceding subparagraph.
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Article 9
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Before the commencement date of the public tender offer, the Offeror, unless buying back its own shares under Article 28-2 of the Act, shall file a report with the FSC, including the Public Tender Offer Report Form and the following documents, in accordance with Article 7:
1. Public tender offer prospectus.
2. The mandate contract entered into between the Offeror and the mandated institution pursuant to Article 15 of these Regulations.
3. The power of attorney to the Offeror's designated representative for litigious and non-litigious matters if the Offeror does not maintain any domicile or business place in the Republic of China (ROC).
4. Other documentation required by the FSC.
If the public tender offer requires approval by or effective registration with the FSC or any other competent government authority, the filing documents shall be reviewed by an attorney, and a lawfully prepared attorney's opinion shall be furnished.
On the reporting date of the public tender offer, the Offeror shall simultaneously serve a copy of the Public Tender Offer Report Form and relevant documents referred to in Paragraph 1 to the public company whose securities are being acquired.
Before the date the public tender offer begins, the Offeror shall publicly announce the Public Tender Report Form, the particulars in Paragraph 2, and the website on which the public tender offer prospectus and related information can be accessed.
The website referred to in the preceding paragraph means the Market Observation Post system as provided in Article 26, Paragraph 2, if the Offeror is a public company; if the Offeror is not a public company, it means the website of the mandated institution.
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Article 10
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An Offeror buying back its own shares in accordance with Article 28-2 of the Act shall publicly announce, and report to the FSC, attaching the Public Tender Offer Report Form and the following supporting documents, before the date the public tender offer begins:
1. The document referred to in Subparagraph 2 of Paragraph 1 of the preceding article.
2. The meeting minutes recording the resolution by the board of directors to buy back the shares.
3. A declaration from a board of directors meeting, stating that, taking into consideration the company's financial condition, there will be no effect on the company's maintenance of capital.
4. The most recent duly disclosed financial report audited or reviewed by a certified public accountant before the board resolution.
5. The opinion of a certified public accountant or securities underwriter on the reasonableness of the buyback price.
6. The documentation required under Article 10 of the Regulations Governing Share Repurchase by Listed and OTC Companies regarding methods for transferring shares to employees or under Article 11 regarding methods for converting shareholding or subscribing shares.
7. Affect on unappropriated retained earnings of the company.
8. Other documentation required by the FSC.
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Article 11
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Any person who individually or jointly with another person(s) intends to acquire within 50 days shares accounting for 20 percent or more of the total issued shares of a public company shall employ a public tender offer to do so.
Where the following conditions are met, the requirement to employ a public tender offer as set forth in the preceding paragraph shall not apply:
1. Transfer of shares between affiliates mentioned in Article 3.
2. Shares obtained under the Taiwan Stock Exchange Corporation Regulations Governing Auction of Listed Securities by Consignment.
3. Shares obtained under the Taiwan Stock Exchange Corporation Regulations Governing Purchase of Listed Securities by Tender Offer or under the GreTai Securities Market Regulations Governing Purchase of OTC Securities by Tender Offer.
4. Shares obtained under Article 22-2, Paragraph 1, Subparagraph 3 of the Act.
5. Implementing a share exchange under the Company Act, Article 156, paragraph 6, or under the Business Mergers and Acquisitions Act, in which new shares are issued to serve as the consideration for acquiring the shares of another public company.
6. Other conditions in conformity with FSC regulations.
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Article 12
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"Jointly with another person(s) intends to acquire [...] issued shares of a public company" in the preceding article refers to acquisition by the intending acquirers, for a common purpose, by means such as a contract, agreement, or other form of meeting of minds, of previously issued shares of a public company.
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Article 14
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The public company whose securities are being acquired shall, within seven days after its receipt of the copy of the Public Tender Offer Report Form and relevant documents reported and publicly announced by the Offeror pursuant to Paragraph 3 of Article 9 [of these Regulations] or to Paragraph 2 of Article 43-5 of the Act, have the following items publicly announced, reported in writing to the FSC for recordation, and copied to the Securities Related Entities:
1. The types, number and amount of shares currently held by the current directors and supervisors and any shareholders with more than 10% of the company's stocks.
2. The recommendation made to the company's shareholders on such tender offer purchase, wherein the names and reasons of every objecting directors shall be recorded.
3. Whether there were major changes on the company's financial conditions after the delivery of its most recent financial statements, and the contents of such changes.
4. The types, number and amount of shares of the Offeror or its affiliated enterprises as defined under Chapter 6-1 of the Company Act held by the current directors, supervisors or the major shareholders having over 10% of the shareholding of the target company.
5. Other relevant important information.
Shares held by persons in Subparagraph 1 and Subparagraph 4 of the preceding paragraph include those held by his/her spouse and minor children and held under the names of other persons.
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Article 19
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After the conditions of the public tender offer have been achieved, the Offeror shall make a public announcement and a report, and shall also notify the mandated institution.
The standard [for determining] that the conditions of the public tender offer have been achieved as referred to in the preceding paragraph shall be that by the expiration of the tender offer period the minimum number of shares for acquisition in the tender offer as set by the Offeror has been reached.
When an Offeree applies to the mandated institution to revoke its offer to sell, it shall do so in writing, except where handled under Article 15, Paragraph 3. However, an Offeree may not revoke its offer to sell after the Offeror has made a public announcement under Paragraph 1, unless otherwise provided by law.
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Article 25
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Report or application documentation submitted under these Regulations shall be prepared and bound in the format prescribed by the FSC; the same shall apply any supplements or corrections thereto.
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