The Securities and Exchange Commission of Pakistan (SECP) has notified Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations, 2017.
The SECP, after due process of law, including comprehensive consultation with the stakeholders and taking the received objections and suggestion into consideration, issued a notification under the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations, 2017.
These Regulations have replaced Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations, 2008. The regulations have been revised for carrying out the purposes and provisions of inter alia Part IX of the Securities Act, 2015, which provides a regulatory framework for the acquisition of voting shares beyond prescribed limit of 30 percent or control of a listed company.
In terms of the newly framed regulations, the timeline for completion of the process of a public offer has been reduced from 92 days to 75 days. Any “consultant to the issue” – duly licensed by the Commission – may be appointed by the acquirer as manager to the offer.
Moreover, considering the liquidity risk, debt securities other than government securities have not been allowed as eligible securities for the performance of obligations by the acquirer under the public offer.
Considering the liquidity risk in debt securities and price risk in equity securities, payments to shareholders have been restricted to cash only. The acquirer is obliged to act in good faith and in the best interest of the target company and its shareholders. Moreover, the acquirer and the target company are required to comply with the requirements of the Act, and the regulations of PSX.