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Legal Update

Hong Kong Proposes to Give More Teeth to Independent Shareholders in Whitewash Transactions

24 January 2018
Mayer Brown JSM Legal Update

The Hong Kong Securities and Futures Commission (SFC) recently launched a three-month consultation (the "Consultation") on a wide range of proposed amendments to the Codes on Takeovers and Mergers and Share Buy-backs (the "Codes"), amongst which key proposals include:

  • raising the independent shareholders' voting approval threshold for all whitewash transactions from simple majority to 75 percent;
  • imposing additional exit requirements for privatisation of Mainland China companies (or companies incorporated in any other jurisdiction that does not afford compulsory acquisition rights) listed in Hong Kong so that any such delisting resolution should be made subject to the offeror receiving 90 percent acceptances from independent shareholders; and
  • empowering the Takeovers Panel (the "Panel") to require compensation to be paid to shareholders who have suffered as a result of a breach of the Codes.

Authors

  • Jacqueline S. T. Chiu
    T +852 2843 2447
  • Chester C. C. Wong
    T +852 2843 4273
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