In order to facilitate merger and acquisition activities, the Securities and Futures Commission (
Under the revisions, a listed company will be allowed to request a trading suspension for the firm it is attempting to acquire through a tender offer.
A tender offer is an offer to buy shares of a corporation, usually at a premium over the company's stock market price.
During tender offers, the share price of the company being acquired sometimes becomes highly volatile. In order to avoid wild price fluctuations, some listed companies wish to apply for a trading suspension while the offer is being carried out.
Currently, trading suspensions for the entire market are only allowed due to "acts of god," such as typhoons or earthquakes. There are no rules regarding suspended trade for individual shares.
The Executive Yuan's economic and finance task force after a Dec. 26 meeting decided that regulations regarding tender offers, share swaps and merger and acquisitions should be revised.
In addition, the task force has proposed requiring government agencies to approve merger cases within 15 days and shortening the period a tender offer lasts to between 10 and 50 days.
After industry leaders asked that regulations regarding corporate takeovers be simplified, Vice Premier Lai In-jaw (
"The related rules and regulations concerning tender offers and other rules related to corporate mergers will be revised before the end of January. After the finance ministry reviews the revisions, they will be promulgated immediately," said Chu Jaw-chyuan (
In order to provide incentives for corporate mergers, the commission has proposed other measures to simplify the procedure for tender offers.
The major revisions include:
-- Corporate takeover cases will not be subject to a detailed review. Government agencies will be required to approve or deny a case within 15 days of receiving an application.
-- To save on the costs of corporate mergers, all application forms will be changed from direct notification to public announcement.
-- The timeframe for corporate mergers will be shortened. It will be changed to between 10 and 50 days from 20 to 60 days today.
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