KUALA LUMPUR (March 27): The Securities Commission Malaysia (SC) has considered a total of 77 applications for take-over and mergers, of which the regulator declined two applications in 2022, according to the SC Annual Report 2022.

Take-overs and mergers are regulated under the Capital Market Securities Act (CMSA), the Malaysian Code on Take-overs and Mergers 2016 (Code) and the Rules on Take-overs, Mergers and Compulsory Acquisitions (Rules).

According to the report, the SC cleared 18 offer documents involving a total offer value of RM2.1 billion or an average of RM116.93 million per offer, which represented a decrease of RM6.49 billion against the previous year (2021: 18 offers with total offer value of RM8.59 billion or an average of RM477.17 million per offer).  

Of these 18 offers, three offers were undertaken by way of schemes (2021: three schemes). In 2022, the privatisation scheme of Cocoaland Holdings Bhd by Fraser & Neave Holdings Bhd was the largest offer at RM490 million in offer value, representing 23% of the total offer value in 2022.

Other notable offers in terms of offer value include Mulpha International Bhd and Hextar Industries Bhd with offer values of RM360 million and RM240 million, respectively.

Of the 18 offers in 2022, 16 were in relation to offeree companies listed on the Main Market of Bursa Malaysia Securities Bhd, one was in relation to an offeree company listed on the LEAP Market of Bursa Malaysia Securities Bhd and one was in relation to an unlisted public company.  

There were five privatisation exercises in 2022 (2021: seven privatisation exercises), four of which were listed on the Main Market and one was listed on the LEAP Market. All five companies had since been successfully delisted from the stock exchange.  

The offer by Jardine Cycle & Carriage Ltd in relation to Cycle & Carriage Bintang Bhd was the offeror’s third attempt to privatise the company, after the offeror’s earlier attempts by way of a selective capital reduction and repayment exercise in 2020 and the subsequent voluntary offer in 2021.  

Cycle and Carriage Bintang has since been delisted on Sept 19, 2022.

In terms of offer value, the consumer products and services sector was the highest with RM990 million in total offer value, representing 47% of the total offer value and involving five offeree companies or 28% of the total number of offers.  

Another sector of significant interest was the industrial product and services sector with a total offer value of RM720 million, representing 34% of the total offer value and involving six offeree companies or 33% of the total number of offers.  

The SC also cleared 25 independent advice circulars comprising 18 circulars in relation to take-over offers/schemes and seven circulars in relation to exemptions from the mandatory offer obligation pursuant to the whitewash procedures.  

Pursuant to the revised Rules issued on Dec 28, 2021, circulars for whitewash exemptions must be submitted to the SC for the commission’s comments and clearance on the contents relating to the whitewash exemptions. Subsequently, there were three whitewash circulars cleared by the SC in 2022.  

Additionally, the SC considered 11 applications for exemptions from having to undertake a mandatory take-over offer, of which six applications related to whitewash exemptions.  

The remaining five applications were related to acquisition of additional voting shares or rights by members of a group acting in concert, and the SC did not approve one of these applications as it did not fully meet the factors stipulated in the Rules.  

Further, the SC also considered 20 applications for various matters under the CMSA and the Rules, including one application which was not approved. A total of six applications were in relation to extensions of time sought to meet obligations under the Rules.

For more SC 2022 Annual Report stories, click here.