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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:
- If consideration is paid in cash:
- If the consideration is the offeror's own funds, the prospectus shall specify the investment framework, the backgrounds of the investors at each tier, the concrete sources and details of the funds, including the identities of the ultimate providers of the funds and the plans relating to the funds arrangements. If the public tender offeror is a company and pays the tender offer consideration with the company's own funds, it shall explain the reasonableness of the source of the funds for this tender based on an analysis of solvency, cash flow, and profitability as shown in the financial reports from the most recent 2 fiscal years prior to the public announcement of this public tender offer.
- If financing is to be used in the purchase of the securities, the prospectus shall provide a detailed description of all financing plans, to include the source of the borrowed funds, the lender and the borrower, and the collateral. If the assets or shares of the subject company, or of the surviving company in the case of a merger, are listed as collateral in the tender offeror's loan repayment plan, the prospectus shall disclose the collateralization terms, and give an assessment of the impact on the financial and operational soundness of the subject company, or of the surviving company in the case of a merger. If none of the above-mentioned exists, the tender offeror shall make a declaration to that effect.
- 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:
- 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.
- The time and cost at which the public tender offeror obtained the securities.
- The method for determining the share exchange ratio, and the factors that were weighed in making the determination.
- 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:
- The minutes of the directors' or shareholders' meeting where it was resolved to offer and issue shares or corporate bonds.
- The terms and conditions of issuance applying to the offering and issuance of the shares or bonds.
- 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.
- The method for determining the share exchange ratio, and the factors that were weighed in making the determination.
- 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.
- Its most recently published financial report audited and certified or reviewed by a CPA.
- 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 of no material changes.
- 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.
If a public tender offeror will pay the consideration in cash under subparagraph 1 of the preceding paragraph, it shall provide a written undertaking that it bears the obligation to perform payment of the tender offer consideration, along with the documentation of all agreements or covenants in connection with the funds arrangement, which shall be included together with the public announcement of the prospectus.
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Article 8
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The following risks associated with tendering shall be noted in conspicuous lettering:
- 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.
- The risk that the Financial Supervisory Commission or another authority might deny approval, suspend registration, reject filing, or revoke approval.
- 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.
- The risk that the time, manner, or place for the payment of the tender offer consideration may be changed due to a natural disaster or emergency event pursuant to the provisions of Article 7-1, paragraph 2 of the Regulations Governing Tender Offers for Purchase of the Securities of a Public Company.
- 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.
- The risk that the time for the tenderer to receive the tender offer consideration may be postponed because the public tender offeror extends the public tender offer period pursuant to Article 18, paragraph 2 of the Regulations Governing Tender Offers for Purchase of the Securities of a Public Company.
- The risk that a tender may not be withdrawn after the conditions of the tender are met and publicly announced, except under a circumstance set forth in Article 19, paragraph 6 of the Regulations Governing Public Tender Offers for Securities of Public Companies.
- The risk that the number of shares tendered may not meet the minimum projected purchase volume.
- The risk that not all shares tendered can be sold.
- 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:
- 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.
- The time at which tenderers are to deliver transacted securities, and the manner and place of delivery.
- The time at which tendered but untransacted securities are to be returned, and the manner and place of return:
- 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.
- 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).
- 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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