Takeovers Panel rules against waiver of general offer obligation in proposed Maanshan Iron acquisition

22 Jul 2019

The Takeovers and Mergers Panel has ruled that a waiver of the general offer obligation under the Takeovers Code will not be granted to China Baowu Steel Group Corporation Limited if it proceeds with the proposed acquisition of a controlling shareholding interest in Maanshan Iron & Steel Company Limited from the State-owned Assets Supervision and Administration Commission of the People’s Government of Anhui Province (Anhui SASAC) at nil consideration. 

The Panel considered, among other things, that nothing has been provided by the parties to demonstrate that China Baowu and Anhui SASAC had been acting in concert at any relevant time prior to the proposed acquisition (Note 1). Even if they had been acting in concert, China Baowu would become the new leader of a concert group and there would be a fundamental change in the balance of the shareholding in Maanshan Iron.

The Panel has also ruled that the applicable offer price would be the volume-weighted average price of Maanshan Iron’s H shares on the last trading day before the company’s announcement on 2 June 2019, under Rule 3.7 of the Takeovers Code.

The Takeovers Executive (Note 2) received an application for a ruling regarding the proposed acquisition regarding Maanshan Iron and referred the matter to the Panel as there were particularly novel, important or difficult points at issue. The Panel met on 19 June 2019 to consider the referral but deferred the publication of its decision by one month at the request of China Baowu (Note 3).

A copy of the Panel’s decision can be found in the "Takeovers and Mergers Panel and Takeovers Appeal Committee decisions and statements" section on the SFC’s website.



  1. Under Note 6(a) to Rule 26.1 of the Takeovers Code, the Takeovers Executive may consider waiving a party’s obligation to make an offer when the general offer obligation is triggered as a result of an acquisition of voting rights by a member of a concert group from another member of the same group. The factors that the Takeovers Executive will take into account include:

    (i) whether the leader of the group or the largest shareholding has changed and whether the balance between the shareholdings in the group has changed significantly;

    (ii) the price paid for the shares acquired; and

    (iii) the relationship between the persons acting in concert and how long they have been acting in concert.

  2. This refers to the Executive Director of the SFC’s Corporate Finance Division or his delegate.
  3. This gave China Baowu time to consider the decision and whether, and if so, how it may proceed with the acquisition. 


Page last updated : 22 Jul 2019