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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Tender Offer means a publicly announced intention by a person acting alone or in concert with other persons to acquire equity securities of a public company. (Rule 19.1 (g), Implementing Rules and Regulations of the Securities Regulations Code)
Tender Offer refers to a publicly announced intention by a person acting alone or in concert with other persons to acquire: (a) outstanding equity shares of a public company; or (b) outstanding equity securities of an associate or related company of such public company which controls the latter. (Securities Regulations Code)
To simplify, tender offer is an offer by the acquiring person to stockholders of a public company for them to tender their shares therein on the terms specified in the offer.
A public company refers to any corporation with a class of equity securities listed on the stock exchange or with assets in excess of Fifty Million Pesos (P50,000,000.00) and having two hundred (200) or more holders, at least two hundred (200) of which are holding at least one hundred (100) shares of a class of its equity securities. (Rule 3 (i), Implementing Rules and Regulations of the Securities Regulations Code)
Republic Act No. 8799 or the Securities Regulations Code provides that:
“Any person or group of persons acting in concert who intends to acquire at least fifteen per cent (15%) of any class of any equity security of a listed corporation or of any class of any equity security of a corporation with assets of at least Fifty Million Pesos (P50,000,000.00) and having two hundred (200) or more stockholders with at least one hundred (100) shares each or who intends to acquire at least thirty per cent (30%) of such equity over a period of twelve (12) months shall make a tender offer to stockholders by filing with the Commission a declaration to that effect; and furnish the issuer, a statement containing such of the information required in Section 17 of this Code as the Commission may prescribe.
Such person or group of persons shall publish all requests or invitations for tender, or materials making a tender offer or requesting or inviting letters of such a security. Copies of any additional material soliciting or requesting such tender offers subsequent to the initial solicitation or request shall contain such information as the Commission may prescribe, and shall be filed with the Commission and sent to the issuer not later than the time copies of such materials are first published or sent or given to security holders.” (Section 19, Chapter VI, Securities Regulations Code)
In the case of CEMCO Holdings, Inc. v. National Life Insurance Company of the Philippines, Inc. (G.R. No. 171815, August 07, 2007), the Supreme Court the purpose of tender offer, to wit:
“Tender offer is in place to protect minority shareholders against any scheme that dilutes the share value of their investments. It gives the minority shareholders the chance to exit the company under reasonable terms, giving them the opportunity to sell their shares at the same price as those of the majority shareholders.”
Read also: WHEN IS TENDER OFFER IN SECURITIES MANDATORY?
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding taxation and taxpayer’s remedies, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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