[M&A] Comparison of Tender Offer Regulation between Taiwan and Thailand

In an acquisition, buyer (offeror) is usually more willing to pay (controlling) premium to major shareholders. In order to protect the benefits of minor shareholders, established the regulation of “Tender Offer”, a type of public takeover, to force buyer pays the same price to all shareholders.

This article is going to briefly compare the tender offer regulation between Taiwan and Thailand. In general, I will focus on two major differences, 1) the ceiling/floor of expected acquiring stakes and 2) the trigger points.

In Taiwan, the ceiling and floor of expected acquiring stakes are more flexible and buyer-friendly. It could be decided by the buyer as long as the distribution and return (for those shares tendered exceed the number to be purchased) is based on a fair mechanism. Regarding the trigger point, regulation in Taiwan adopts the “flow criteria”, which might not necessarily acquire controlling stake and the acquiring period could be possibly managed to avoid triggering a tender offer.

“ Any person who individually or jointly with another person(s) intends to acquire within 50 days shares accounting for 20 percent or more of the total issued shares of a public company shall employ a public tender offer to do so.” (Article 11)

In Thailand, the ceiling and floor of expected acquiring stakes are not allowed to be designated under mandatory tender offer. However, there are some exceptions. The threshold could be set up under conditional voluntary offer and the ceiling could be set up under partial offer. Talking about the trigger point, regulation in Thailand follows the “stock criteria”, which is more straight forward but stricter in some circumstances.

“ Any person who has purchased or taken any other action, which results in his acquisition of shares, or his becoming a holder of shares, of any business at the end of any particular day reaching or exceeding any trigger point specified below shall make a tender offer for all securities of that business: (1) 25% of the total voting rights of the business; (2) 50% of the total voting rights of the business; (3) 75% of the total voting rights of the business.” (Article 4)

The following is a brief comparison table. Please refer to the original regulation and explanations by authorities for more details.