A bid is made public in the case of either a mandatory tender offer (MTO), which follows a change of control, or a voluntary tender offer (VTO). Before the offeror can proceed with either, he or she must announce their intention to the public. The announcement must be reviewed by the Indonesian Financial Services Authority (Otoritas Jasa Keuangan or OJK) before it is released. The offeror can only proceed with the MTO or VTO after the OJK states that it has no objection to the tender offer statement.
Type of Disclosure Required
In the case of a share acquisition involving a non-public company, generally no disclosure is required other than a public announcement through a nationally circulated newspaper, which contains very basic information concerning the buyer and the target and the fact that there will be a change of control over the company.
If the share acquisition is made over a public company through the issue of shares, the issue will be subject to shareholder approval through a general meeting of shareholders (GMS), which must be preceded by the circulation of a fully-fledged prospectus by the target company.
Producing Financial Statements
There is no requirement for bidders to produce a financial statement, other than the requirement that the bidder has the financial capability. Committed funding is required before announcing an offer. A party conducting a VTO must prepare a statement on the availability of funds to settle the VTO, which must be supported by an opinion from the accountant, bank or securities company involved. In practice, the same also applies to MTOs.
Transaction documents are not required to be disclosed, either in a non-public or public company merger or acquisition. The pricing, however, must be disclosed in an acquisition of a public company, particularly if an MTO is required to be conducted by the new controller following the acquisition. This is because the price to be offered by the new controller in an MTO must not be lower than the price used in acquiring the shares in the initial acquisition.
If a shareholders' agreement is signed when acquiring a public company, it may become necessary to later disclose the key terms of the agreement to the OJK. This is typically the case when the buyer must demonstrate to the OJK that there will be no change of control occurring from the transaction and that an MTO will therefore not be necessary.
This first appeared in the Chambers Corporate M&A 2020 global guide, published by Chambers and Partners. You can find the full chapter here.
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