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Regulations Governing Information to be Published in Public Tender Offer Prospectuses(2005.06.22) |
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Article 1
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These Regulations are adopted pursuant to Article 43-4, paragraph 2, of the Securities and Exchange Act (the "Act").
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Article 2
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The basic principles for preparing a public tender offer prospectus are as follows:
1. The contents of a public tender offer prospectus must be detailed and unambiguous, and may not contain any misrepresentations or nondisclosures.
2. The contents of the prospectus must be up to date. All transactions or other events occurring before the printing of the prospectus which are likely to affect the judgment of interested parties shall be disclosed.
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Article 3
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The following items shall be printed in the order below on the cover of the public tender offer prospectus:
1. The signature or seal of the public tender offeror. If the public tender offeror is a company, the signature or seal of its responsible person must also be included.
2. The name of the company being acquired.
3. The type(s) of securities being purchased.
4. The volume of securities being purchased.
5. The tender offer consideration.
6. The tender offer period.
7. The following text shall be printed prominently:
(1) The public tender offeror and any other parties that have signed or sealed the public tender offer prospectus shall bear legal liability for any misrepresentations or nondisclosures contained in this public tender offer prospectus.
(2) Tenderers are strongly advised to read this public tender offer prospectus carefully and take note of the risks associated with tendering.
8. The URL for the website(s) to visit for further information about the prospectus.
9. The date of printing.
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Article 4
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The public tender offer prospectus shall include the following information:
1. Basic information on the public tender offer.
2. Public tender offer conditions.
3. Type(s) and source(s) of public tender offer consideration.
4. The risks associated with tendering.
5. Procedures to be followed after expiration of the period of public tender offer.
6. The public tender offeror's shareholdings in the subject company.
7. The circumstances of any other purchases and sales by the public tender offeror of shares in the subject company.
8. The public tender offeror's business plan for the subject company.
9. The resolution [to initiate the public tender offer], and an opinion on its reasonableness.
10. An explanation of any other material information.
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Article 5
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The basic information on the public tender offer shall include the following items:
1. Where the public tender offeror is a natural person, the name and occupation of the offeror, his or her spouse, and any minor age children shall be indicated.
2. Where the public tender offeror is a company, the prospectus shall indicate the name, website address, and principal line(s) of business of the company, the names of its directors, supervisors, and any shareholders owning more than 10% of the public tender offeror's total issued shares, and the shareholdings of said parties.
3. The name, address, and telephone number of the mandated institution and the matters that it has been mandated to handle.
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Article 6
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The public tender offer conditions shall include the following items:
1. Period of public tender offer.
2. Maximum and minimum projections for the volume of shares to be purchased through public tender offer.
3. The public tender offer consideration.
4. After the public tender offer conditions as filed by the offeror have been satisfied and an announcement to that effect has been made, a tenderer is not allowed to cancel its tender unless otherwise provided by statute.
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Article 7
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The section on type(s) and source(s) of public tender offer consideration shall include the following items:
1. If consideration is paid in cash:
(1) An itemized statement of the offeror's funds [to be used for the acquisition].
(2) If financing is to be used in the purchase of the securities, the prospectus shall provide a detailed financing plan, to include the source of the borrowed funds and the primary borrower(s). If subject company assets are listed as collateral in the tender offeror's loan repayment plan, the prospectus shall disclose the collateralization terms. If not, the tender offeror shall make a declaration to that effect.
2. If securities set out in Article 8, paragraph 1, of the Regulations Governing Tender Offers for Purchase of the Securities of a Public Company will be paid as consideration for the acquisition, the prospectus shall include:
(1) The names and types of securities to be paid as tender offer consideration, their average prices and trading volumes over the most recent three months, and their closing prices on the day prior to filing.
(2) The time and cost at which the public tender offeror obtained the securities.
(3) The method for determining the share exchange ratio, and the factors that were weighed in making the determination.
3. If securities set out in Article 8, paragraph 2, of the Regulations Governing Tender Offers for Purchase of the Securities of a Public Company will be paid as tender offer consideration, the prospectus shall include:
(1) The minutes of the directors' or shareholders' meeting where it was resolved to offer and issue shares or corporate bonds.
(2) The terms and conditions of issuance applying to the offering and issuance of the shares or bonds.
(3) If shares of the same type as those to be offered and issued by the public tender offeror are already being traded on a centralized securities exchange market or an over-the-counter market, the prospectus shall disclose the average price and trading volume over the most recent three months, and the closing price on the day prior to filing.
(4) The method for determining the share exchange ratio, and the factors that were weighed in making the determination.
(5) The company's financial reports for the past two fiscal years; where the company has been in business for less than two years, the prospectus shall include the financial reports for the fiscal year(s) during which the company has been in business.
(6) Its most recently published financial report audited and certified or reviewed by a CPA.
(7) An explanation shall be provided for any material changes in the company's financial or business operations that have occurred between the date of the balance sheet in its most recently submitted financial report and the date on which it filed the public tender offer. If there have been no material changes, the public tender offeror shall make a declaration to that effect.
(8) A statement describing the projected effect of the acquisition of the subject securities upon the financial and business operations of the public tender offeror over the three-year period following acquisition.
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Article 8
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The following risks associated with tendering shall be noted in conspicuous lettering:
1. The risk that the public tender offer could be suspended pursuant to provisions set out in the Act under Article 43-5, paragraph 1, subparagraphs 1 through 3.
2. The risk that the Financial Supervisory Commission or another authority might deny approval, suspend registration, reject filing, or revoke approval.
3. The risk that the competent authority, acting pursuant to the provisions set out in Article 43-5, paragraph 2, of the Act, might order the public tender offeror to re-file and re-publish content of the previously filed and published public tender offer.
4. If shares or corporate bonds to be offered and issued will be paid as tender offer consideration pursuant to the provisions of Article 8, subparagraph 2, of the Regulations Governing Tender Offers for Purchase of the Securities of a Public Company, the risk that such securities cannot be issued on schedule.
5. The risk of not being able to withdraw the tender due to satisfaction of the tender offer conditions.
6. The risk that the number of shares tendered may not meet the minimum projected purchase volume.
7. The risk that not all shares tendered can be sold.
8. Any other material risk that the public tender offeror knows could affect the share purchasing process.
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Article 9
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Information to be published with regard to procedures that will be followed after expiration of the period of public tender offer:
1. The time at which the public tender offeror will pay the tender offer consideration, and the manner and place of payment. If foreign securities are to be paid as tender offer consideration, there shall be an explanation of the delivery method and how tenderers are to conduct the trade for those securities.
2. The time at which tenderers are to deliver transacted securities, and the manner and place of delivery.
3. The time at which tendered but untransacted securities are to be returned, and the manner and place of return:
(1) The manner in which the tender offeror will handle the return of tendered securities if the number of shares tendered falls short of the minimum number to be purchased.
(2) The manner in which the tender offeror will handle the return of excess tendered securities if the number of tendered securities exceeds the maximum number to be purchased (in which case the tender offeror is required to purchase from all tenderers a pro rata portion of the securities tendered).
4. If securities set out in Article 8, paragraph 2, of the Regulations Governing Tender Offers for Purchase of the Securities of a Public Company are to be paid as tender offer consideration, the prospectus shall indicate whether cash or other securities will be substituted in the event the aforementioned securities cannot be issued on schedule. If no other substitute form of consideration is to be provided, the prospectus shall indicate the manner in which the tender offeror is to handle the return of tendered securities.
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Article 10
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Information to be published with regard to the public tender offeror's shareholdings in the subject company:
1. If the public tender offeror or any related party thereof already holds securities of the subject company at the time of the filing, the prospectus shall indicate the types, number, and acquisition cost thereof, as well as the relevant transaction records for the six months preceding the day of filing. The prospectus shall also include the information set out in the preceding sentence if the public tender offeror is a company and any of its directors or supervisors holds securities of the subject company.
2. If the public tender offeror or any shareholder thereof either serves as a director or supervisor of, or owns more than a 10% stake in, the subject company, the prospectus shall indicate the name and shareholding status of such shareholder(s).
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Article 11
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Information to be published with regard to other circumstances relating to purchases and sales by the public tender offeror of shares in the subject company:
1. If the public tender offeror has bought or sold securities of the subject company from or to any of the persons listed below during the six months prior to filing of the public tender offer, the prospectus shall indicate the date(s), counterparty(ies), price(s), and volume(s) of the share transaction(s):
(1) Any director, supervisor, or managerial officer of the subject company, or any shareholder owning more than a 10% stake in the subject company.
(2) Any related party as set out in Article 3 of the Regulations Governing Tender Offers for Purchase of the Securities of a Public Company.
If the public tender offeror has entered into any agreement or deal concerning the public tender offer with any of the persons listed in the preceding subparagraph, the prospectus shall disclose the important content of the agreement or deal.
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Article 12
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Information to be published with regard to the public tender offeror's business plan for the subject company:
1. The goal and plan of the public tender offeror in acquiring the subject company's securities:
(1) Willingness to continue operating the business of the subject company, and the content of plans to that effect.
(2) Any plan to transfer the securities of the subject company to another party within one year after acquisition, and the contents of the plan.
2. If there is any plan that would lead to any of the following situations after completion of the public tender offer, such plan shall be included:
(1) Dissolution of the subject company; its delisting from an exchange (or OTC market); material changes in its organization, capital, business plan, financial operations, or production; or any other matter of material significance that would affect the subject company's shareholder equity.
(2) Any plan for reassignment, retirement, or severance of the subject company's directors, supervisors, managerial officers, or employees.
3. If, in addition to the current public tender offer, there is another plan to acquire or dispose of securities or material assets of the subject company within one year of the day on which the period of public tender offer expires, the content of the plan shall be disclosed.
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Article 13
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The resolution [to initiate the public tender offer], and an opinion on its reasonableness:
1. If the public tender offeror is a natural person, the prospectus shall include an appraisal by an independent expert of the reasonableness of the cash price calculation or share exchange ratio of the public tender offer consideration.
2. If the public tender offeror is a company, the prospectus shall include the minutes of the shareholders meeting or directors meeting where it was resolved to initiate the tender offer, and an appraisal by an independent expert of the reasonableness of the cash price calculation or share exchange ratio of the public tender offer consideration.
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Article 14
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An electronic file of the public tender offer prospectus, formatted in the manner required by the Financial Supervisory Commission, shall be transmitted to the website specified by the public tender offeror in the announcement. If the public tender offer is changed in any way, the content of the public tender offer prospectus shall be amended immediately, and the amended information shall be provided on the aforementioned website.
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Article 15
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These Regulations shall enter into force from the date of issuance.
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