[Last updated: 1 January 2025, unless otherwise noted]

4.1 Types of public takeover bid

1. Voluntary tender offer

   The bidder can voluntarily adopt a tender offer to all shareholders for all or part of their shares.

2. Mandatory tender offer

   A mandatory tender offer is triggered in the following situations:

   • A person or group of persons acting in concert as a result of an acquisition of shares, holds directly or indirectly more than 30% of the shares of the target company and continues to increase the shareholding;
   • A person plans to acquire more than 30% of a target company by way of an agreement (the part of the shares exceeding the 30% shall be acquired by tender offer); and
   • A person who is not a shareholder but who has equity interests in a listed company through investment, agreement and other arrangements exceeds 30% ownership of the target company’s issued shares.

4.2 Exemption from adopting a tender offer

The bidder may be exempt from the tender offer requirement if:

• the share transfer is conducted between different subjects under the control of the same actual controller and will not result in change of the actual controller of the target company;
• (i) the target company faces severe financial difficulty; (ii) the reorganization plan for saving the company as proposed by the purchaser is approved by the general meeting of shareholders of that company; and (iii) the purchaser undertakes not to transfer its shares within 3 years;
• the gratuitous transfer, change, or merger of state-owned assets carried out upon approval of the government or the administrative department of state-owned assets causes the equity held by a person in a listed company to exceed 30% of the issued shares of that company;
• a listed company repurchases shares from specific shareholders according to the determined price approved by the general meeting of shareholders, which results in a reduction of share capital, thereby rendering the shares held by the person in the company exceeding 30% of the issued shares of that company;
• the shares held by a person in a listed company exceeds 30% of the issued shares of that company due to the issuance of new shares to such person by the listed company upon approval by the non-affiliated shareholders of the general meeting of shareholders, the investor commits not to transfer such new shares issued to itself within 3 years and the general shareholders’ meeting approve the exemption from tender offer by the investor;
• the equity held by a person in a listed company reaches or exceeds 30% of the issued shares of that company and, after 1 year from such occurrence, the increase of shares in that company within each 12 month period does not exceed 2% of the issued shares of that company;
• the equity held by a person in a listed company reaches or exceeds 50% of the issued shares of that company and the investor continuing to increase its shareholding does not affect the status of the company as a listed company;
• the lawful engagement in underwriting, loans and other businesses by a securities company, bank, or other financial institution causes the equity held by that securities company, bank, or other financial institution to exceed 30% of the issued shares in a listed company, and that securities company, bank, or other financial institution has conducted no act and has no intent to actually control the company and instead proposes to transfer the relevant shares to non-affiliated parties within a reasonable time;
• the equity held by a person in a listed company exceeds 30% of the issued shares of that company due to inheritance;
• the equity held by a person in a listed company exceeds 30% of the issued shares of that company due to share repurchase in accordance with a securities repurchase securities agreement, and the voting rights of the subject shares is not transferred during the term of the agreement;
• the equity held by a person in a listed company exceeds 30% of the issued shares of that company due to the recovery of the voting rights of the preferred shares held by the person in accordance with the law; or
• other circumstances determined by the CSRC apply.

4.3 The price and the proportion of shares in a tender offer

• If a bidder acquires the shares of a listed company by a tender offer, the proportion of shares to be acquired shall not be lower than 5% of the issued shares of that listed company.
• The bidder is in principle free to determine the price and the form of consideration offered to the target shareholders:
  • The offered price may be paid in cash, securities or a combination of both, except in the following circumstances: 
    • The purchaser shall pay the acquisition price in cash if a bidder sends a general tender offer (i) for the purpose of delisting a listed company or (ii) due to its failure to meet the condition for exemption from adopting a tender offer; or
    • If the bidder elects to pay the takeover price in transferable securities, it shall also offer the shareholders of the target company a cash alternative to choose.
  • The offered price for the same share class shall not be lower than the highest price paid by the bidder for that share class within six months before the brief announcement is made of the tender offer.
  • Shareholders that hold the same share class shall be treated equally.