Among the Member States of the European Union, the 2004 Takeover Directive sets general standards for national takeover legislation, including a rule for a mandatory offer, although the choice of threshold is left to each state.  But now, thanks to genkho Candoz`s generosity, Yeoh is forced to renew only a mandatory tender offer at RM2.50 per share at a more attractive price. Business observers might have a sense of déjà vu or resemble the unconditional MGO that chemical entrepreneur Datuk Eddie Ong Choo Meng launched last year at Ipoh-based glove maker Rubberex Corp (M) Bhd. But it is likely that Yeoh, a 74-year-old man with experience in corporate transactions, will not be deterred by the offer obligation. Indeed, the MGO price of RM2.50 per share represents a discount of 15.82% compared to Can-One`s last transaction price of RM2.97 on May 3 before the suspension of trading in its shares. In the United States, the Williams Act of 1968, which regulates takeover bids, does not contain provisions requiring mandatory offers, as there are concerns that such provisions will increase transaction costs in mergers and acquisitions.  As a general rule, a mandatory offer must be made if the acquiring company exceeds a certain threshold of participation in the target company or acquires effective control over the target.  Most countries, with the notable exception of the United States, have such a requirement.  The purpose of mandatory offer schemes is to protect minority shareholders in situations where control of the target is transferred and, in particular, to prevent acquisitions motivated by private control advantages by requiring the payment of a premium for such control.  Where a voluntary offer is contemplated, a letter of intent or commitment should only be obtained from the major shareholders in certain circumstances before a tender offer is made. Indeed, requests for mandatory general offers are triggered by agreements concluded by a tenderer that would allow him to hold more than 33% of the voting rights in a company. The rules provide that a voluntary offer becomes a mandatory offer if the offeror or the CCP acquires voting shares or voting rights (except through acceptances) that trigger an obligation to make a mandatory offer.
In early June, Hextar Rubber Sdn Bhd (“Hextar Rubber”) and Datuk Ong Choo Meng, Executive Director of Hextar Global Bhd, collectively acquired 57.25 million shares (20.63% stake) in Rubberex, a small-cap glove manufacturer, in addition to their current 29.55% stake in Rubberex, bringing their collective stake to 50.18%. This acquisition triggers the 33% threshold to make a mandatory offer for the remainder of the shares they do not hold by the Company at a cash offer price of RM1.80 per share. Simply put, it was just a technical GO, as any other shareholder would not accept the RM2.50 offer. In the context of a takeover bid, as soon as the offeror has received sufficient acceptances from the shareholders of the target company, the offer becomes “unconditional with regard to acceptances”. With the purchase of shares of 20.94%, the collective share of the bidder and THE PACs increased to 60.57%, which led to this mandatory offer. However, the joint bidders intend to maintain Can-One`s listing status on Bursa Malaysia. Prior to the acquisition, Yeoh, the largest shareholder of Eller Axis, held 7.51 million shares of Can-One, or 3.91%, while Eller Axis held 45.59 million shares of Can-One, or 23.73%. The share of persons acting jointly (PAC) with the tenderer amounted to 23.06 (11.99) million. Brazilian company law provided for a mandatory offer rule before 1997.
It was repealed this year and partially reinstated in 2000 under pressure from institutional investors. An important transaction carried out before the reintroduction of the rule was the sale by the Brazilian government of the 66.7% of Banco Banespa`s voting shares to Banco Santander, in which Banco Santander`s takeover bid covered only the state of the government and excluded minority shareholders.  “Both the buyer and the seller adhere to the rules in form, but not in substance; There is an element of fraud on the part of minority shareholders. If there is evidence that the price actually paid for a set of shares is higher than the DBT price, the buyer may be compelled to offer the higher actual price to minority shareholders through a revised GO. Unfortunately, there is not much that can be done unless there is evidence of wrongdoing. Otherwise, it`s a case of a willing buyer, a willing seller – no matter how irrational [the deal] is,” he admits. But it shouldn`t matter to Yeoh, a school teacher who has become an entrepreneur and is the ultimate supplier of this MGO. In addition, in accordance with Article 222 of the CMSA, the Offeror may, after the submission of a tender offer, compulsorily acquire the shares of the remaining minority shareholders if the Offeror acquires 90% of the nominal value of the shares of this class (with the exception of shares already held by the Offeror or the PACs) for which the Offer was made within four months of the submission of this Offer. So what are the thresholds for expanding a mandatory offer in Malaysia? In Malaysia, a bidder, with its persons acting in concert (“PAC”), triggers the requirement to make a mandatory tender offer to acquire all the shares of the target company if: Although the United States is the main model for Taiwan`s mergers and acquisitions laws, Taiwan introduced a mandatory partial offer requirement in Section 43(1) of the Securities and Exchange Act [zh] in 2002. The mechanisms of the rule were largely based on uk and Hong Kong rules, although Taiwan only needed a partial offer to purchase outstanding shares, rather than the full offer required in the UK and Hong Kong.
 In Hong Kong, mandatory offers are subject to Rule 26 of the Takeover and Merger Code issued by the Securities and Futures Commission since 1975. The Code has no legal value.  However, compliance with the Code is required by Listing Rule 13.23 of the Hong Kong Stock Exchange.  The objective of a mandatory tender offer is to protect minority shareholders and ensure equal treatment of all shareholders. The mandatory tender offer allows the remaining shareholders of the target company to leave the company at the price paid by the offeror in the event of a change in control of the company. .