Chapter: 32  COMPANIES ORDINANCE

Schedule Num: 9  Version Date 01/04/2003

PROVISIONS RELATING TO ACQUISITION OF MINORITY SHARES AFTER SUCCESSFUL TAKE-OVER OFFER

NINTH SCHEDULE

[section 168]

PART 1-Right of company to buy out minority shareholders

1. If, in a case in which the offer does not relate to shares of different classes, the transferee company has, during the period of 4 months beginning on the date of the offer, acquired not less than nine-tenths in value of the shares for which the offer is made (by virtue of acceptances of the offer or, if the shares are listed on a recognized stock market, by virtue of acceptances of the offer or otherwise), the transferee company may give notice to the holder of any shares to which the offer relates which the transferee company has not acquired that it desires to acquire those shares.  (Amended 10 of 1987 s. 11; 5 of 2002 s. 407)

2. If, in a case in which the offer relates to shares of different classes, the transferee company has, during the period of 4 months beginning on the date of the offer, acquired not less than nine-tenths in value of the shares of any class for which the offer is made (by virtue of acceptances of the offer or, if the shares are listed on a recognized stock market, by virtue of acceptances of the offer or otherwise), the transferee company may give notice to the holder of any shares of that class which the transferee company has not acquired that it desires to acquire those shares.  (Amended 10 of 1987 s. 11; 5 of 2002 s. 407)

3. Any notice under this Part shall be given in the specified form and in the prescribed manner and not later than 5 months after the date of the offer; and where such a notice is given to the holder of any shares the transferee company shall, subject to paragraph 4, be entitled and bound to acquire those shares on the terms of the offer.  (Amended 3 of 1997 s. 60)

4. Where a notice is given under this Part to the holder of any shares the court may, on an application made by him within 2 months from the date on which the notice was given, order that the transferee company shall not be entitled and bound to acquire the shares or specify terms of acquisition different from those of the offer.

5. Where an offer is such as to give the holder of shares a choice of terms, any notice under this Part shall give particulars of the choice and state-

(a) that the holder of the shares may within 2 months from the date of the notice exercise that choice by letter sent to the company at an address specified in the notice; and

(b) which terms are to be taken as applying in default of his exercising the choice as aforesaid, and the terms of the offer mentioned in paragraph 3 shall be determined accordingly.

6. Where an offer is such that the holder of shares in the transferor company is to receive shares or debentures of the transferee company but with an option to receive instead some other consideration to be provided by a third party-

(a) the terms of the offer mentioned in paragraph 3 shall not include that option unless the transferee company in its notice under this Part indicates that the option is to apply; and

(b) if the transferee company does not so indicate it may, if it thinks fit, offer in that notice a corresponding option to receive some other consideration to be provided by that company,

and, if the transferee company offers such a corresponding option and the holder of the shares within 2 months from the date of the notice exercises that corresponding option by a letter sent to the company at an address specified in the notice, the terms of the offer mentioned in paragraph 3 shall be determined accordingly.

For the purposes of this paragraph, consideration shall be deemed to be provided by a third party where it is made available to the transferee company on terms that it shall be used by the transferee company as consideration pursuant to the offer.

7. Where a notice has been given under this Part and the court has not, on an application made by the person to whom the notice was given, ordered to the contrary, the transferee company shall, on the expiration of 2 months from the date on which the notice has been given or, if an application to the court is then pending, after that application has been disposed of-

(a) transmit a copy of the notice to the transferor company together with an instrument of transfer executed on behalf of the shareholder on whom the notice was served by any person appointed by the transferee company; and

(b) pay or transfer to the transferor company the amount or other consideration representing the price payable by the transferee company for the shares which by virtue of this Part that company is entitled to acquire, and the transferor company shall thereupon register the transferee company as the holder of those shares; but no instrument of transfer shall be required for any share for which a share warrant is for the time being outstanding.

8. Any sums received by the transferor company under paragraph 7 shall be paid into a separate bank account, and any such sums and any other consideration so received shall be held by that company on trust for the several persons entitled to the shares in respect of which the said sums or other consideration were respectively received; but any such sum or other consideration shall not be paid out or delivered to any person claiming to be entitled thereto unless he produces the share certificate of such shares or other evidence of his title thereto, or a satisfactory indemnity in lieu of such certificate or other evidence.

PART 2-

Right of minority shareholders to be bought out by company

9. If the offer does not relate to shares of different classes and not later than the expiration of the period within which the offer can be accepted the transferee company is the holder of not less than nine-tenths in value of all the shares in the transferor company or, if the offer relates to a class of shares, not less than nine-tenths in value of all the shares of that class, the holder of any shares to which the offer relates who has not accepted the offer before the expiration of that period may by letter addressed to the transferee company require it to acquire those shares.

10. If the offer relates to shares of different classes and not later than the expiration of the period within which the offer can be accepted the transferee company is the holder of not less than nine-tenths in value of the shares of any class for which the offer is made, the holder of any shares of that class who has not accepted the offer before the expiration of that period may by letter addressed to the transferee company require it to acquire those shares.

11. Within 1 month of the expiration of the period within which the offer can be accepted the transferee company shall give notice in the specified form and in the prescribed manner to a person having rights under this Part calling on him to decide whether or not to exercise them, but he shall not be entitled to exercise them later than 2 months after the date on which the notice is given.  (Amended 3 of 1997 s. 60)

12. Where the holder of any shares exercises his rights under this Part the transferee company shall be entitled and bound to acquire the shares on the terms of the offer or on such other terms as may be agreed or as the court, on the application of the holder of the shares or the transferee company, thinks fit to order.

13. Where an offer is such as to give the holder of shares a choice of terms and he requires the transferee company to acquire the shares under this Part without the company having given him a notice under paragraph 11, the requirement shall not have effect unless it indicates an exercise of that choice.

14. Where an offer is such as to give the holder of shares a choice of terms and the company gives him a notice under paragraph 11, the notice shall give particulars of the choice and state-

(a) that he may exercise the choice in making a requirement under this Part; and

(b) which terms are to be taken as applying if he makes such a requirement without exercising the choice,

and the terms of the offer mentioned in paragraph 12 shall be determined accordingly.

15. Where an offer is such that the holder of shares in the transferor company is to receive shares or debentures of the transferee company but with an option to receive instead some other consideration to be provided by a third party-

(a) the terms of the offer mentioned in paragraph 12 shall not include that option unless the transferee company in a notice under paragraph 11 indicates that the option is to apply; and

(b) if the transferee company does not so indicate it may, if it thinks fit, offer in such a notice a corresponding option to receive some other consideration to be provided by that company,

and, if the transferee company offers such a corresponding option and the holder of the shares exercises that corresponding option in his requirement under this Part, the terms of the offer mentioned in paragraph 12 shall be determined accordingly.

For the purposes of this paragraph, consideration shall be deemed to be provided by a third party where it is made available to the transferee company on terms that it shall be used by the transferee company as consideration pursuant to the offer.

(Ninth Schedule replaced 6 of 1984 s. 257)

Our latest offshore news
30/09/2006
Welcome to join our discussions
on Offshore Companies, Incorporations,
Jurisdictions, etc..
23/10/2007
A company operating in Hamburg, Beiersdorf Aktiengesellschaft has recently announced entering a share purchase agreement with a BVI-incorporated Global Source Investments Limited and Hong Kong-incorporated C-BONS Holding (International) Limited.
02/07/2007
Hong Kong Financial Secretary Henry Tang suggests that issuing renminbi-denominated financial bonds in Hong Kong will reinforce its banking status. Monetary Authority Chief Executive Joseph Yam has also commented on this issue.
20/06/2007
According to the data released by the Census & Statistics Department of Hong Kong, the BVI is one of the top destinations for Hong Kong's external factor income outflow and inflow in Quarter 1 of 2007.
15/06/2007
The government of Hong Kong has published its final report on the public consultation on tax reform to provide recommendations about exploring some options aimed at the development and enlargement of narrow tax base in Hong Kong.
02/06/2007
On May 28, 2007, the launch of Unsolicited Electronic Messages Ordinance from June 1 was announced by Hong Kong's Commerce, Industry & Technology Bureau. The Ordinance is to be carried out in 2 phases.
20/05/2007
At the Swiss Private Bankers' Association's meeting, Hong Kong Financial Secretary Henry Tang invited swiss bankers to use Hong Kong as a regional base for managing their businesses in Asia.
12/05/2007
At the Hong Kong Economic and Trade Office Seminar named "Hong Kong - New Opportunities as an International Financial Centre", Joseph Yam announced a strategy to make a greater Hong Kong's contribution to the reform and liberalisation of the Mainland China and to maintain the status of Hong Kong as an international financial centre.
27/04/2007
On April 25, 2007, Hong Kong Financial Secretary Henry Tang told legislators that from 2004 to 2005 growth in Hong Kong's combined fund-management business was on 25%.
12/04/2007
According to the Global Financial Centers Index (GFCI), Hong Kong is the 3rd most competitive financial centre in the world.
30/03/2007
India's largest public sector bank in terms of aggregate business, Canara Bank announced that it is opening the 1st branch in Hong Kong, which is an expanding move for the bank.
12/03/2007
At the 14th APEC SME Ministerial Meeting, Director-General of the Hong Kong Trade & Industry department, stated that Hong Kong's favourable business environment is underpinned by the rule of law, free flow of capital and information, a low and simple tax regime, an independent judiciary and an efficient government.
21/02/2007
According to the announcement made by the Hong Kong Monetary Authority (HKMA) on February 7, 2007, Hong Kong's official foreign currency reserve assets amounted to the total of USD 133.7 billion in the end of January 2007.
09/02/2007
Hong Kong Monetary Authority announced the amount of official foreign currency reserve assets on the end of January 2007, which totalled at USD 133.7 billion.
01/02/2007
Rewrite of the Companies Ordinance will bring substantial benefits to Hong Kong, especially in strengthening competitiveness of the jurisdiction and its status as a global business and financial centre.
29/01/2007
Hong Kong is to receive benefits from increased links with the market of mainland China, as stated by Hong Kong Monetary Authority Chief Executive.
26/01/2007
New Anti-Money Laundering rules are introduced by Hong Kong's Security Bureau. Customers' identities and record transactions of HK$ 8 000 dollars or more must be verified by remittance agents and money changers.
17/01/2007
The Heritage Foundation has ranked Hong Kong as the freest economy in the world for the 13th consecutive year. It is followed by Singapore and Australia.
06/01/2007
Comparing to 2005, property sale and purchase agreements in Hong Kong in 2006 fell 19.9%. This fact was released on January 4, 2007 by the Land Registry.
03/01/2007
Financial Secretary of Hong Kong, Henry Tang understands people's high expectations for the 2007-2008 Budget, however, he suggests the necessity of a balance between the interests of different parties when devising it.
21/12/2006
In November, inflation in Hong Kong accelerated to 2.2% on higher clothing, housing and food prices. To compare this figure, the Census and Statistics Department indicates 2% inflation in October.
08/11/2006
According to the IMF, the economy of Hong Kong is expected to grow by 6% this year and maintain growth of 5% in 2007. The IMF stated that growth prospects will depend on the management and expanding the evolving financial integration with the Mainland.
30/10/2006
In Hong Kong, two new banking regulations have been gazetted to be tabled at the Legislative Council on November 1. These are the Banking (Capital) Rules and Banking (Disclosure) Rules. The rules are to be in force from January 1, 2007.
18/10/2006
According to the UN's World Investment Report 2006, Hong Kong attracted USD 35.9 billion in foreign direct investment (FDI) last year, up 5.6% on 2004. So, Hong Kong is the 2nd-largest FDI destination in Asia after China, which amassed USD 72.4 billion.
16/10/2006
Hong Kong is likely to refuse discussing joining the EU's tax information-sharing scheme applied under the Savings Tax Directive. The EU would like to sign the Agreement and include information-sharing there.
25/11/2007
Recently, the Seychelles International Business Authority has sponsored Asia Offshore Association (AOA) Conference in Vietnam, and International Tax Planning Association (ITPA) meeting in Hong Kong.