In Hong Kong, all takeover, merger, privatisation and share buy-back activities affecting public companies are regulated by the Codes on Takeovers and Mergers and Share Buy-backs (Codes) which are issued by the SFC in consultation with the Takeovers and Mergers Panel.
The Codes are designed to afford fair treatment of shareholders by:
- requiring equality of treatment of shareholders;
- mandating disclosure of timely and adequate information to enable shareholders to make an informed decision as to the merits of an offer; and
- ensuring there is a fair and informed market in the shares of companies affected by takeovers, mergers, privatisations and share buy-backs.
The Codes provide an orderly framework within which takeover, merger, privatisation and share buy-back activities take place. While having no force of law, the Codes represent a consensus of opinion among Hong Kong market participants and the SFC regarding standards of commercial conduct and behaviour considered acceptable for takeovers and mergers, privatisations and share buy-backs. The Codes are framed in non-technical language where possible.
Companies subject to the Codes are:
- public companies in Hong Kong;
- companies with a primary listing of their equity securities in Hong Kong; and
- real estate investment trusts with a primary listing of their units in Hong Kong.
Click here for a list of secondary listed companies in Hong Kong that are not subject to the Codes.
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Last update: 14 Feb 2020