Takeover can be realized through different means, for example, share acquisition, asset acquisition and business merger. In case of share acquisition for business takeover, a person acquiring shares of a public limited company to take substantial control over the company is subject to the Takeover Provisions of the Securities and Exchange Act of 1992 (SEA) and the associated rules issued thereunder.
Founded on the principle of investor protection, the Takeover regulations provide existing shareholders with choices of fair exit and continued holding when new major shareholders take over the company. On the management side, the regulations facilitate corporate control that encourages major shareholders, board of directors and the management to perform duties efficiently for the best interest of the company.
In addition, the Takeover regulations focus on disclosure of information on change of securities holding, either an increase or a decrease of securities of major shareholders. This means substantial holding of securities must be disclosed to the public and reflect actual power of management. Hence, the report on substantial holding must include securities holding of family members, i.e., spouse and minor children and subsidiaries, collectively called “related person” under Section 258 of the SEA, and those acting in concert under the Notification of the Capital Market Supervisory Board No. TorChor 7/2552 Re: Acting in Concert as a Result of the Nature of a Relationship or Behavior and Requirements under Sections 246 and 247.