On 15 August 2016, the Malaysian Minister of Finance (MOF) revoked the Malaysian Code on Take-Overs and Mergers 2010 (Old Code). In its place is the Malaysian Code on Take-Overs and Mergers 2016 (New Code). Contemporaneous with this replacement, the Securities Commission Malaysia (SC) has also issued the Rules on Take-Overs, Mergers and Compulsory Acquisition 2016 (Rules).
The changes introduced by the Rules reflect the SC’s desire to move towards a proportionate regulatory regime. On the one hand, changes have been made to facilitate take-overs, such as the abolishment of the requirement for an offeror and persons acting in concert (PACs) to hold more than 50% of the voting shares of the offeree before undertaking a take-over by way of a scheme. However, the changes also provide a higher degree of protection to offeree shareholders in the form of enhanced disclosure requirements and the enhanced role and obligation of independent advisers.
The Rules also provide guidance in areas that were previously subject to scrutiny and led to confusion amongst the offeror, offeree and their respective advisers. These changes are welcomed and has brought Malaysia’s take-over regime closer to other mature jurisdictions such as the United Kingdom and Hong Kong.