SINGAPORE: The regulatory unit of the Singapore Exchange (SGX RegCo) has made two changes to the rules governing voluntary delistings.
The move comes after a public consultation last year following a spate of buyout deals.
The first change by SGX RegCo stipulates that the offeror and parties acting in concert with the offeror cannot vote on the voluntary delisting resolution, SGX said in a news release on Thursday (Jul 11).
This means that only minority shareholders as well as directors and controlling shareholders who are not the party making the offer or who are not acting in concert with it, can vote on the voluntary delisting resolution.
“Arising from feedback, the approval threshold is maintained at 75 per cent of total number of shares held by independent shareholders present and voting,” SGX said.
It added the previous 10 per cent block - which refers to the requirement that the voluntary delisting resolution must not be voted against by more than 10 per cent of the total number of issued shares held by shareholders present and voting - will be removed.
SGX said in its comments on the consultation paper that it did not think it appropriate to retain the 10 per cent block provision as it may be difficult for minority shareholders to collectively obtain the requirement when the issuer is tightly controlled.
The second change requires the exit offer be reasonable and fair for the voluntary delisting to proceed. Previously, the listing rules only required an exit offer to be reasonable, but did not require it to be fair.
An offer is "fair" if the price offered is equal to or greater than the value of the offeree securities, according to the Securities Industry Council, as quoted by SGX on its website.
“In arriving at the new voluntary delisting framework, SGX RegCo was cognisant of the need to ensure that exit offers are fair and reasonable, so as to better align the interests of the offeror and independent shareholders,” SGX RegCo CEO Tan Boon Gin said.
SGX added: “To ensure investors understand the opinions of independent financial advisors (IFAs), SGX expects the bases for determining the fairness and the reasonableness of the offer be separately detailed."
It said it will work with relevant industry bodies to develop guidance and standards for IFAs and their opinions.
SGX also noted offerors should not use other forms of privatisation to avoid complying with the new rules.