Acquiring voting shares: SECP issues new procedure on payment mode

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has issued a new procedure on the mode of payment for acquiring the voting shares of the listing companies by the acquirers including investors and shareholders.

The SECP has issued an SRO 1828 (I)/2022 here on Wednesday to amend the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations, 2017.

The new procedure on the mode of payment revealed that the consideration for the voting shares to be acquired by the acquirer shall be payable in the form of cash; or by exchange or transfer of shares of listed company owned or held or proposed further issuance of shares by the acquirer or any person acting in concert subject to the specified conditions.

Such a company is listed for at least two years before the date of announcement of offer and shares of such a listed company are presently being traded at the normal counter of the securities exchange. Provided that in case of proposed further issuance of shares, appropriate regulatory approvals in accordance with the requirements of the Companies Act, 2017 are in place prior to the Public Announcement of Offer.

The consideration for the voting shares to be acquired by the acquirer shall be payable in the form of the exchange or transfer of listed debt instruments owned/ issued by the acquirer or held by any person acting in concert; or by exchange or transfer of listed convertible debt securities owned/ issued by the acquirer or held by any person acting in concert; or by exchange of transfer of government debt securities owned/ held by the acquirer or by any person acting in concert, the SECP stated.

For the purpose of calculating the consideration for existing, as well as, new securities, 90 days average closing price of respective security before the public offer shall be considered.

Under the regulations, the SECP has elaborated the procedure for disclosure of shares by the purchaser of the target company (company to be sold).

Copyright Business Recorder, 2022