Take-overs and mergers

Take-over questions are numbers questions in disguise. You must spot when control (more than 33%) or the 2% creeper is triggered, work out the minimum offer price from a purchase history, read an offer timetable in days from dispatch, and test the nine-tenths compulsory acquisition hurdle correctly. The law sits in three layers: Division 2 of Part VI of the CMSA (sections 216 to 225), the Malaysian Code on Take-overs and Mergers 2016 with its twelve general principles, and the SC's Rules on Take-overs, Mergers and Compulsory Acquisitions, which hold the detailed procedures and timelines.

9 min read6 sections

Malaysian Code on Take-overs and Mergers 2016 (P.U.(B) 356/2016) and Rules on Take-overs, Mergers and Compulsory Acquisitions (SC-GL/1-2016 (R2-2021), revised 28 December 2021, effective 29 December 2021) with Appendix 1 timeline and the 2021 FAQ, read on sc.com.my on 12 October 2026; CMSA 2007 Part VI Division 2 (ss.216-225) in the consolidated text incorporating amendments in force on 1 January 2026, cross-checked against the original 2007 text (the January 2026 amendments did not touch these sections). Fee amounts in Appendix 2 of the Rules are not used, as new fee regulations took effect on 1 January 2026. As at October 2026. Independent prep, not endorsed by SIDC or the SC.

Must-know for the exam

Control means more than 33% of voting shares or voting rights; obtaining it triggers a mandatory offer unless the SC exempts (CMSA ss.216(1), 218(2)).
Creeper: a holder of over 33% but not over 50% triggers an offer by acquiring more than 2% in any six months (Code para 15; Rules para 2.01).
Mandatory offer price: at least the highest price paid in the offer period and six months before; voluntary offers look back three months (Rule 6.03).
Mandatory offers: cash or a wholly cash alternative, conditional only on acceptances taking the offeror's group above 50% (Rules 6.01(1), 6.04(1)).
Offer document within 21 days of the notice; open at least 21 days; independent advice circular within 10 days of dispatch; lapses 5.00 p.m. Day 60.
No revision after Day 46; once unconditional, open 14 more days; cash paid within 10 days, securities within 14 (Rules 12.03, 12.05, 14.01).
Compulsory acquisition: acceptances of at least nine-tenths of offer shares, excluding shares already held; notice within two months of reaching it (CMSA s.222).
Brokers and advisers connected with an offer disclose their dealings in offeree shares to the SC by 12.00 noon on the next market day (Rule 19.05).
SC administrative penalty up to RM1 million (CMSA s.220); failing to make a required offer: fine up to RM1 million, jail up to 10 years, or both (s.218(4)).

On this page · 6 sections

Traps that cost marks

Testing each purchase alone instead of adding up acquisitions over the rolling six months.
Counting shares the offeror already held towards the nine-tenths acceptance test.
Mixing up the six-month look-back for mandatory offers with the three-month look-back for voluntary offers.
Treating 50% as the take-over trigger; in Malaysia control starts above 33%.
Confusing Day 60 (acceptance deadline) with Day 46 (last revision) or Day 95 (outer limit for other conditions).
Measuring the creeper from the old peak holding instead of the new, lower base.
Assuming a voluntary offer can always be all-paper.
Counting from the acceptance date when the acceptance came in while the offer was still conditional.

Control, the creeper and mandatory offers

Section 216(1) of the CMSA defines control as more than 33% of the voting shares or voting rights. Under section 218(2) and Rule 4.01, an acquirer must make a mandatory offer when it obtains control or triggers the creeping threshold, however the acquisition happens, including through a scheme or a share buy-back by the company.

Holding before the purchase	What triggers a mandatory offer
33% or less	Going above 33%
Over 33% to 50%	Acquiring more than 2% in any six-month period
Over 50% (statutory control)	Nothing further; the holder may buy freely

•Acquisitions are added together over a rolling six months: 1.5% plus 0.8% within four months is 2.3%, which triggers an offer.
•A disposal sets a new, lower base (Note 7(b)): sell from 45% to 38%, then buy to 41%, and the 3% rise triggers an offer.
•Holdings of persons acting in concert are aggregated, and every member of the group can incur the obligation (Note 4).
•Exemptions (Rules 4.08-4.15) include whitewash, rescue of a distressed offeree, foreclosing lenders, placement down to 33% and buy-backs. Apply before the trigger (Rule 4.07(1)).

Trap: Testing each purchase separately against 2%, or measuring the creeper from an old peak holding rather than the lowest holding in the last six months.

Takeaway: Above 33% is control. Between 33% and 50%, more than 2% in six months triggers an offer. Above 50%, the creeper stops.

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Take-overs and mergers

9 min read6 sections

Must-know for the exam

Control means more than 33% of voting shares or voting rights; obtaining it triggers a mandatory offer unless the SC exempts (CMSA ss.216(1), 218(2)).
Creeper: a holder of over 33% but not over 50% triggers an offer by acquiring more than 2% in any six months (Code para 15; Rules para 2.01).
Mandatory offer price: at least the highest price paid in the offer period and six months before; voluntary offers look back three months (Rule 6.03).
Mandatory offers: cash or a wholly cash alternative, conditional only on acceptances taking the offeror's group above 50% (Rules 6.01(1), 6.04(1)).
Offer document within 21 days of the notice; open at least 21 days; independent advice circular within 10 days of dispatch; lapses 5.00 p.m. Day 60.
No revision after Day 46; once unconditional, open 14 more days; cash paid within 10 days, securities within 14 (Rules 12.03, 12.05, 14.01).
Compulsory acquisition: acceptances of at least nine-tenths of offer shares, excluding shares already held; notice within two months of reaching it (CMSA s.222).
Brokers and advisers connected with an offer disclose their dealings in offeree shares to the SC by 12.00 noon on the next market day (Rule 19.05).
SC administrative penalty up to RM1 million (CMSA s.220); failing to make a required offer: fine up to RM1 million, jail up to 10 years, or both (s.218(4)).

On this page · 6 sections

Traps that cost marks

Testing each purchase alone instead of adding up acquisitions over the rolling six months.
Counting shares the offeror already held towards the nine-tenths acceptance test.
Mixing up the six-month look-back for mandatory offers with the three-month look-back for voluntary offers.
Treating 50% as the take-over trigger; in Malaysia control starts above 33%.
Confusing Day 60 (acceptance deadline) with Day 46 (last revision) or Day 95 (outer limit for other conditions).
Measuring the creeper from the old peak holding instead of the new, lower base.
Assuming a voluntary offer can always be all-paper.
Counting from the acceptance date when the acceptance came in while the offer was still conditional.

Control, the creeper and mandatory offers

Holding before the purchase	What triggers a mandatory offer
33% or less	Going above 33%
Over 33% to 50%	Acquiring more than 2% in any six-month period
Over 50% (statutory control)	Nothing further; the holder may buy freely

•Acquisitions are added together over a rolling six months: 1.5% plus 0.8% within four months is 2.3%, which triggers an offer.
•A disposal sets a new, lower base (Note 7(b)): sell from 45% to 38%, then buy to 41%, and the 3% rise triggers an offer.
•Holdings of persons acting in concert are aggregated, and every member of the group can incur the obligation (Note 4).
•Exemptions (Rules 4.08-4.15) include whitewash, rescue of a distressed offeree, foreclosing lenders, placement down to 33% and buy-backs. Apply before the trigger (Rule 4.07(1)).

Trap: Testing each purchase separately against 2%, or measuring the creeper from an old peak holding rather than the lowest holding in the last six months.

Takeaway: Above 33% is control. Between 33% and 50%, more than 2% in six months triggers an offer. Above 50%, the creeper stops.

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Persons acting in concert and the general principles

Persons acting in concert co-operate, under any formal or informal agreement or understanding, to obtain or exercise control (CMSA s.216(2), (4)). Section 216(3) presumes concert parties unless the contrary is shown.

•A corporation and its related and associate corporations (an associate is 20% or more owned, s.216(5)).
•A corporation and its directors, their close relatives, spouses and related trusts.
•A person and a fund he manages on a discretionary basis; partners of a partnership.
•A holder of 20% or more of a corporation with that corporation's group; a financier and the borrower it funds (licensed banks excepted).

General principle (Code 2016)	In short
1	Equal treatment of shareholders of the same class, including the control premium
3	The offeror must be able to implement the offer in full; its adviser must be satisfied
4	The offeree appoints a competent independent adviser
6	Sufficient information and reasonable time to decide
10	Offer made to all shareholders of the class for all voting shares
11	Offeree board must not deny shareholders the chance to decide
12	The offer period should be no longer than reasonable

Trap: Believing the offeree board may reject an offer on shareholders' behalf. General principle 11 leaves the decision with shareholders.

Takeaway: Concert parties are presumed from relationships, then rebutted with evidence. The Code's principles protect equal treatment and the shareholders' right to decide.