What it covers
The Code applies to corporations with a primary listing in Singapore, real estate investment trusts and business trusts with a primary listing, and certain unlisted public companies with 50 or more shareholders and net tangible assets of S$5 million or more. It is administered by the Securities Industry Council, which encourages parties to consult it early.
Public deals in Singapore are done by general offer or by scheme of arrangement. A scheme is approved by a majority in number of shareholders present and voting, representing three-quarters in value, and then sanctioned by the court. Either route involves confirmatory due diligence by the offeror, usually in a data room the target opens after a confidentiality agreement and, for schemes, an implementation agreement.
Equality of information is the rule that shapes the room. If the target gives information to one offeror or potential offeror, it must give the same information to another bona fide offeror or potential offeror on request. Directors therefore think carefully about what goes into the room, and keep a record of everything disclosed and to whom.
Key provisions and what they mean in the room
| Rule | What it says | In the data room |
|---|---|---|
| Mandatory offer (Rule 14) | A person who acquires 30% or more of voting rights, or holds between 30% and 50% and acquires more than 1% in any six months, must generally make an offer. | Stake-building analysis and shareholding records sit in a restricted counsel folder. |
| Equality of information to offerors | Information given to one offeror must be given equally to a competing bona fide offeror on request. | Keep a full log of documents disclosed to each party so the same set can be provided. |
| Secrecy before announcement | Information about an offer must be kept secret before announcement, and parties must take care to prevent leaks. | Use code names, watermarks and tight access lists; review the activity log daily. |
| Schemes of arrangement | Court-sanctioned schemes need approval by a majority in number representing three-quarters in value of shareholders present and voting. | Implementation agreement, scheme document drafts and IFA materials go to advisers only. |
Setting up the room
Treat the room as a disclosure record
Every document shown to a potential offeror may have to be shown to a rival. Keep versions locked and the access log complete.
Restrict price-sensitive data
Unpublished results, forecasts and strategic plans need a separate folder with named access and watermarking.
Plan for a competing bid
Be ready to open an identical room for another bona fide offeror quickly.
Coordinate with the independent financial adviser
The IFA advising independent directors may need its own access group.
Checklist
- SIC consulted where the position is unclear.
- Confidentiality agreements in place for each potential offeror.
- Disclosure log kept per party.
- Price-sensitive folders restricted and watermarked.
- Leak response plan agreed with the company secretary and advisers.
Source: Singapore Code on Take-overs and Mergers; Companies Act 1967, section 210. This page is general information, not legal or tax advice.
Questions people ask
Does the Take-over Code apply to private company deals?
Generally no. It applies to Singapore-listed corporations, listed REITs and business trusts, and unlisted public companies with 50 or more shareholders and net tangible assets of S$5 million or more. Private company sales follow the share purchase agreement and general law.
Must a target give every bidder the same data room access?
The Code requires information given to one offeror or potential offeror to be given, on request, to another bona fide offeror or potential offeror. It does not require the target to invite anyone, but once information is shared it must be available equally.
How long does a Singapore scheme take?
A typical scheme takes around three to five months from announcement to completion, covering the scheme document, shareholder meeting, court sanction and regulatory approvals. Due diligence usually happens before the announcement.