Why deals fail

Author: | Published: 1 May 2009

Hostile or unsolicited transactions for companies listed on the Stock Exchange of Hong Kong Limited (HKEx) have been extremely rare. During this decade there have only been 11 unsolicited transactions announced in respect of HKEx-listed companies. The last burst of interest occurred in 2002-2003, shortly after the crash of the internet bubble. It is very likely that the 66% crash in the benchmark Hang Seng Index (HSI) since October 2007 will result in another burst in interest. As a result, it is imperative that advisors be familiar with the relevant history as well as the intricacies and obstacles unique to the market and regulatory structure in Hong Kong that have made unsolicited transactions such a rare breed.

Takeovers in Hong Kong Public takeovers in Hong Kong are governed primarily by the Hong Kong Code on Takeovers and Mergers and Share Repurchases (Takeovers Code) administered by the Securities and Futures Commission (SFC)....