This content is from: Japan

Japan: Amendments of the disclosure rules for tender offers

On June 23, draft amendments to the Cabinet Office Order on Disclosure Required for Tender Offer for Share Certificates, etc. by Person Other than Issuer, as well as other related Cabinet Office Orders and FAQs, were published by the Financial Services Agency of Japan.

In general, certain purchases - for example, share purchases outside of financial instruments exchange markets (i) after which the shareholding ratio of the purchaser and persons in a special relationship with such purchaser (shareholding ratio) exceeds five percent from 10 or less persons within 61 days or (ii) after which the shareholding ratio exceeds one-third) must be made by means of tender offer. In such cases, the purchaser is required to give a public notice for commencing tender offer and file the tender offer notification. These amendments mainly intend to remove some entry items from these disclosure documents in response to requests for deregulation from the relevant industry organisations. The following is a brief summary of these amendments.

Public notice for commencing tender offer

Since the public notice for commencing tender offer is practically made through the Edinet [the Financial Services Agency’s electronic disclosure system] where the tender offer notification is disclosed, and since most entry items of the public notice for commencing tender offer is also included in the tender offer notification, some entry items (i.e. (i) the ratio of voting rights pertaining to shares to be purchased, (ii) the shareholding ratio, (iii) the agreements between the target company or an officer thereof, and (iv) information of the purchaser) will be removed from the public notice for commencing tender offer.

Tender offer notification

Since the shareholding ratio of small lots holders who are persons in a special relationship with the purchaser is excluded from the shareholding ratio that is an application criterion of the tender offer, the number of voting rights of small lots holders will be removed from the tender offer notification.

In addition, the domicile of registry and nationality that must be described in the tender offer notification if the purchaser is an individual will be removed from the tender offer notification, because this is treated as sensitive information.

It is expected that these amendments will simplify the public notice for commencing tender offers and tender offer notifications, thereby reducing the burden of the disclosure of tender offers on the purchaser - so it is likely that the amendments will promote tender offers.

Ryosuke Fukuhara

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