[Last updated: 1 January 2025, unless otherwise noted]
4.1 Types of public takeover bid
The main methods of acquiring control of a public company in Malaysia are:
4.2 Voluntary takeover offer
In a voluntary takeover, the offer document must include a condition that makes the takeover offer conditional on the bidder receiving acceptances that result in the bidder holding an aggregate of more than 50% of the target's voting shares. In computing the level of acceptances for a voluntary offer, the bidder must not aggregate the voting shares of its PAC unless such persons are joint offerors.
The bidder can set a higher acceptance threshold (but the threshold must be more than 50%). This is especially significant when the bidder wants to compulsorily acquire the voting shares from minority shareholders during the compulsory acquisition process.
In addition, the bidder cannot impose a condition the fulfilment of which depends on either:
If a voluntary offer is contemplated, a memorandum of understanding or undertaking should only be obtained, in limited circumstances, from key shareholders before making a takeover offer. This is because the mandatory general offer requirements are triggered by arrangements entered into by a bidder that would result in it holding more than 33% of the voting rights in a company. The Rules provide that a voluntary offer becomes a mandatory offer if the bidder or PAC acquires voting shares or voting rights (other than through acceptances) that trigger an obligation to make a mandatory offer.
Once a takeover offer has been announced, it is common for the bidder to seek undertakings from key shareholders to secure their acceptance of the offer. The requirement to make a public announcement is triggered in certain circumstances, including when a bidder intends to seek irrevocable commitments. In that case, the bidder must make the announcement. The offer document should disclose undertakings.
However, unless approved by the Securities Commission, the bidder or its PAC are not permitted to make arrangements with selected shareholders, if such arrangements have favorable conditions which are not being extended to all of the target's shareholders either:
Note also that where the takeover offer is successful, there are also restrictions on the ability of an offeror to acquire further securities on more favorable terms than the previous takeover offer, within 6 months immediately after the close of the takeover offer.
4.3 Mandatory takeover offer
No condition can be attached to a mandatory offer other than the condition that the offer is subject to the bidder having received acceptances which would result in the bidder and its PAC holding in aggregate more than 50% of the target's voting shares (see 4.2 above). No other condition can be attached.
If the bidder has acquired, already holds or is entitled to acquire more than 50% of the target's voting shares when the offer is made, the offer shall be unconditional (unless approved by the Securities Commission).
The bidder must make a mandatory takeover offer for voting shares when the bidder (or PAC):
An exemption from the mandatory general offer requirements can also be obtained from the Securities Commission, depending on the circumstances of the case.