2. Takeover Principles

The Takeover Regime is based on a number of general principles which the Panel, in deciding how to exercise its powers, shall seek to give effect to. The principles, which are expressed in broad terms and are to be applied and interpreted in accordance with their spirit in order to achieve their underlying purpose, are —

(1) all holders of the securities of an offeree company of the same class must be afforded equivalent treatment; moreover, if a person acquires control of a company, the other holders of securities must be protected,
(2) the holders of the securities of an offeree company must have sufficient time and information to enable them to reach a properly informed decision on the takeover transaction; where it advises the holders of securities, the board of the offeree company must give its views on the effects of implementation of the takeover transaction on employment, conditions of employment and the locations of the company's places of business,
(3) the board of an offeree company must act in the interests of the company as a whole and must not deny the holders of securities the opportunity to decide on the merits of the takeover transaction,
(4) false markets must not be created in the securities of the offeree company, of the offeror company or of any other company concerned by the takeover transaction in such a way that the rise or fall of the prices of the securities becomes artificial and the normal functioning of the markets is distorted,
(5) an offeror must announce a takeover transaction only after ensuring that he/she can fulfil in full any cash consideration, if such is offered, and after taking all reasonable measures to secure the implementation of any other type of consideration, and
(6) an offeree company must not be hindered in the conduct of its affairs for longer than is reasonable by a takeover transaction for its securities.