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Amended Article

Title:

Regulations Governing Public Tender Offers for Securities of Public Companies  CH

Amended Date: 2016.11.18 
Article 7-1     An Offeror shall adopt uniform acquisition conditions in the public tender offer, and may not make any of the following modifications to the acquisition conditions:
  1. Lower the public tender offer price.
  2. Lower the proposed number of securities to be acquired through the public tender offer.
  3. Shorten the public tender offer period.
  4. Other particulars as prescribed by the FSC.
     The Offeror may not change the time, manner, or place for payment of tender offer consideration as specified in the prospectus, provided that this restriction does not apply in the event of a natural disaster or emergency event. The occurrence and cessation of an above-mentioned event shall be determined and announced by the relevant competent authorities pursuant to relevant laws and regulations.
    The Offeror may not enter into an agreement or covenant with any specific shareholder of the subject company entitling the shareholder to obtain any special rights after the shareholder's participation in the tender through an offer to sell, so that there might exist any discrepancy in the substantial acquisition conditions among shareholders.
Article 9     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.
     The Public Tender Offer Report Form and accompanying documents must be reviewed by a lawyer and the lawyer shall issue a legal opinion. If the public tender offer requires approval by or effective registration with the FSC or any other competent government authority, a lawyer's opinion shall concurrently be issued thereto.
     The Offeror shall provide proof that it has the ability to perform payment of the tender offer consideration.
    If the tender offer consideration is to be cash, the proof under the preceding paragraph shall include one of the items in the following subparagraphs:
  1. A performance guarantee issued by a financial institution that designates the mandated institution as the beneficiary, and that authorizes the mandated institution to demand in its sole discretion the exercise of the performance guarantee and instruct the allocation of funds for the purpose of payment of the consideration.
  2. Written confirmation that the Offeror has the ability to perform payment of the tender offer consideration, issued by a financial adviser with the qualification of a securities underwriter or by a CPA that conducts the business of auditing and attesting the financial reports of public companies, after such CPA or adviser has gained a full understanding of the Offeror and taken reasonable steps to evaluate the Offerer's sources of funds.
    The financial adviser or CPA under subparagraph 2 of the preceding paragraph may not have any interest relationship with the Offeror or with the public company whose securities are being acquired that could affect the adviser or CPA's independence.
    On the reporting date of the public tender offer, the Offeror shall simultaneously serve a copy of the Public Tender Offer Report Form, the public tender offer prospectus, 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 Paragraphs 2 and 3 and the public tender offer prospectus.
    If the FSC, pursuant to Article 43-5, paragraph 2 of the Act, orders the Offeror to amend any reported content of a public tender offer, the public tender offer period shall be calculated anew from the date the Offeror makes the new report and public announcement.
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Article 14     The public company whose securities are being acquired shall, within 15 days after its receipt of the copy of the Public Tender Offer Report Form, the public tender offer prospectus, and relevant documents reported and publicly announced by the Offeror pursuant to Paragraph 3 of Article 9, 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 board of directors shall make recommendations to the company's shareholders with respect to the status of verification of the identity and financial condition of the Offeror, fairness of the tender offer conditions, and reasonableness of the sources of the tender offer funds, and the specific assenting and dissenting opinions of the directors and their reasons therefor shall be clearly 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.
    The board of directors must fully disclose the verification measures already adopted and the related procedures with respect to the verification conducted under paragraph 1, subparagraph 2, and if an expert is engaged to issue a written opinion, it shall be made public along with the disclosure.
    After receiving documents in connection with a new report and public announcement made by the Offeror pursuant to Article 43-5, paragraph 2 of the Act (hereinafter, a "new report and public announcement"), if the public company whose securities are being acquired must consequently amend the status of verification of relevant matters or its recommendations to the shareholders under paragraph 1, subparagraph 2 herein, it shall, within 15 days, make a new public announcement of the items in that subparagraph, and prepare and submit a written report to the FSC for recordation, with a copy to the Securities Related Entities.
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Article 14-1     After a public company whose securities are being acquired has received the copy of the Public Tender Offer Report Form, the public tender offer prospectus, and other documents reported and publicly announced by the Offeror under Article 9, paragraph 6, it shall promptly form a review committee, and within 15 days publicly announce the results of the review and the documentation showing that the review committee members meet the requirements under paragraph 4 of the present article.
    The review committee of the preceding paragraph shall investigate and review the identity and financial conditions of the Offeror, fairness of tender offer conditions, and reasonableness of the sources of the tender offer funds, and make recommendations to the company shareholders with respect to the present tender offer. The review committee must fully disclose the verification measures already adopted and the related procedures with respect to the verification conducted under paragraph 1, subparagraph 2, and if an expert is engaged to provide a written opinion, it shall be made public along with the disclosure.
    The review committee members shall not be fewer than 3 persons. If the public company whose securities are being acquired has independent directors, it shall be composed of the independent directors. If the number of independent directors is insufficient or there are no independent directors, it shall be composed of members selected by the board of directors.
    The eligibility conditions for review committee members shall comply with the requirements set out in Article 2, paragraph 1 and Article 3, paragraph 1 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies.
    The review committee's review results shall require the assent of one-half or more of all the committee members, and the status of verification, the specific assenting or dissenting opinions of the committee members, and their reasons shall be submitted to the board of directors. Article 7, paragraph 2 of the Regulations Governing the Establishment and Related Matters of Special Committees of Public Companies for Merger/Consolidation and Acquisition shall apply mutatis mutandis to the methods for member attendance at the meetings.
     The discussions at a review committee meeting shall be included in the meeting minutes. The proceedings of a review meeting shall be recorded in their entirety by the company in audio or video and preserved as evidentiary documentation. Article 10 of the Regulations Governing the Establishment and Related Matters of Special Committees of Public Companies for Merger/Consolidation and Acquisition shall apply mutatis mutandis to the period and method for preservation of the minutes and relevant evidentiary documentation.
    After receiving documents in connection with a new report and public announcement by the Offeror, the public company whose securities are being acquired shall promptly notify the review committee to conduct a review and make a new public announcement of the results of the review within 15 days.
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Article 15     An Offeror shall mandate the institutions that are permitted by law to handle shareholder services for others to be responsible for the taking Tenderer's deposit of securities, the delivery of public tender offer prospectus, and the receipt and payment of the public tender offer funds or securities, etc.:
     A mandated institution shall set up a segregated account for the receipt and payment of funds or securities under the preceding paragraph, and shall perform its fiduciary duties faithfully and with due care.
     The mandated institution shall meet the qualifications and requirements specified in the Regulations Governing the Administration of Shareholder Services of Public Companies, and shall not have received any official reprimand or more severe disciplinary action by the FSC in connection with public tender business within the most recent year. This restriction need not apply, however, if concrete steps have been taken to correct the infraction and the FSC has recognized the improvement.
    When a mandated institution takes deposit of securities from the Tenderer, it shall issue to the Tenderer a receipt describing the types and number of the securities.
    When a mandated institution takes deposit of securities from the Tenderer by means of book-entry via a securities firm or a custodian bank, it shall comply with regulations applying to centralized securities depository enterprises.
Article 18     The length of public tender offer period shall not be less than 20 days nor more than 50 days.
    If what is provided under Paragraph 2 of Article 7 occurs or for another legitimate reason, the original Offeror may report to the FSC and make a public announcement of an extension of the public tender offer period. However, the extension period(s) shall not exceed a total of 50 days.
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Article 19     For purpose of these Regulations, the expression that "the conditions of the public tender offer have been achieved" means 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. If the public tender offer involves any matter that requires the approval of the FSC or other competent authority or that requires an effective registration, the approval shall have been obtained or the effective registration made.
     With respect to any of the following matters, the Offeror shall submit a regulatory filing with the FSC and make a public announcement, with a copy thereof to the mandated institution within 2 days counting inclusively from the date of occurrence of the fact:
  1. It has obtained approval or effective registration from another competent authority before the conditions of the public tender offer have been achieved.
  2. The conditions of the public tender offer have been achieved.
  3. The tender offer consideration has been transmitted to the mandated institution's segregated account for public tender offer.
  4. After the conditions of the public tender offer have been achieved, the number of securities tendered reaches the maximum number to be purchased.
     If, on the expiration day of the public tender offer period, the conditions of the public tender offer have not been achieved, or the number of securities tendered exceeds the number to be purchased, for the securities which have been deposited but not transacted, the Offeror shall, on the business day following the expiration of the public tender offer period, return to the Tenderer the securities deposited by the Tenderer.
     After the conditions of the public tender offer have been achieved, if the Offeror does not complete the payment by the time for payment of the tender offer consideration as specified in the prospectus, the tenderer may, without issuing any notice of payment due, terminate the contract at its sole discretion. The mandated institution shall, on the following business day, return to the tenderer the securities deposited by the tenderer. However, if the time to return the securities to the tenderer, as specified in the prospectus, is earlier than the time for payment of tender offer consideration, such stipulation shall govern.
    When a Tenderer applies to revoke its offer to sell, it shall do so in writing.
    A Tenderer may not revoke its offer to sell after the Offeror has made a public announcement under Paragraph 2, subparagraph 2, unless under any of the following circumstances:
  1. A circumstance set out in Article 7, Paragraph 2.
  2. The Offeror has submitted a regulatory filing with the FSC and made a public announcement of an extension of the public tender offer period pursuant to Article 18, Paragraph 2.
  3. The offer to sell is voidable under any other law.
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Article 24     "Legitimate reason" in Paragraph 3 of Article 43-5 of the Act refers to any of the following:
  1. Circumstances set forth in Paragraph 2 of Article 7.
  2. Where consent has been given by a resolution of the board of directors of the public company whose securities are being acquired, as evidenced by supporting documents. However, this shall not apply where the entirety of the body of directors of the public company whose securities are being acquired does not conform to the provisions of Article 26 of the Act.
  3. Where the Offeror's failure to complete the public tender offer in the previous instance was caused by another domestic competent authority not yet having issued its review results, and that authority subsequently made a decision of approval.
  4. Other legitimate reasons.
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