SIDC Module 6 Take-overs and mergers question: Kenari incur a mandatory offer obligation

SIDC Module 6Take-overs and mergers

Kenari Bhd has held 40% of Delta Bhd's voting shares for over a year. It buys a further 1.5%, and four months later another 0.8%. Does Kenari incur a mandatory offer obligation?

A Yes, on the second purchase, which lifts its holding by 2.3% within six months
B No, as a mandatory offer needs the holding to cross 33% again
C No, since its holding of 42.3% is still below the 50% statutory control level
D No, as each purchase on its own is below the 2% creeping limit

Show the answer and explanation

Answer: A. Yes, on the second purchase, which lifts its holding by 2.3% within six months

Paragraph 15 of the Malaysian Code on Take-overs and Mergers 2016 and the 'creeping threshold' definition in paragraph 2.01 of the Rules on Take-overs, Mergers and Compulsory Acquisitions mean that a holder of more than 33% but not more than 50% incurs a mandatory offer obligation (Rule 4.01(b)) if it acquires more than 2% of the voting shares in any six-month period. Purchases are aggregated: 1.5% + 0.8% = 2.3% within four months, so the obligation arises on the second purchase. Testing each purchase separately misses the aggregation. Being below 50% is exactly when the creeper applies, and a holder above 33% can trigger an offer without crossing 33% again. Source: Malaysian Code on Take-overs and Mergers 2016 (P.U.(B) 356/2016) para 15; Rules on Take-overs, Mergers and Compulsory Acquisitions (SC-GL/1-2016 (R2-2021), revised 28 December 2021) paras 2.01, 4.01(b) (as at October 2026).

Common mistake

Testing each purchase alone instead of adding up acquisitions over the rolling six months.

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Related SIDC Module 6 questions

Before its offer for all remaining shares, an offeror held 40% of an offeree. Acceptances bring in another 51%, taking it to 91%. Can it compulsorily acquire the rest under section 222 of the CMSA?Before the offer period, an acquirer paid RM2.40 per offeree share eight months ago, RM2.10 five months ago and RM1.95 two months ago. The price is now RM1.80. What is the minimum mandatory offer price?An investor holding 30% of a listed company's voting shares buys a further 4%, taking her to 34%. She has no exemption. What is the consequence?

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Original study material mapped to the public SIDC Module 6 syllabus. Unofficial, not endorsed by SIDC or the SC. Verify figures and rules against current guidance before relying on them.

SIDC Module 6 Take-overs and mergers question: Kenari incur a mandatory offer obligation

SIDC Module 6Take-overs and mergers

Kenari Bhd has held 40% of Delta Bhd's voting shares for over a year. It buys a further 1.5%, and four months later another 0.8%. Does Kenari incur a mandatory offer obligation?

A Yes, on the second purchase, which lifts its holding by 2.3% within six months
B No, as a mandatory offer needs the holding to cross 33% again
C No, since its holding of 42.3% is still below the 50% statutory control level
D No, as each purchase on its own is below the 2% creeping limit

Show the answer and explanation

Answer: A. Yes, on the second purchase, which lifts its holding by 2.3% within six months

Common mistake

Testing each purchase alone instead of adding up acquisitions over the rolling six months.

Practise more Module 6 Take-overs and mergers questions

Exam-style questions with worked answers, then full timed mocks. Free to start.

Start practising →

Build a daily practice habit — a few exam-style questions a day, with worked answers. Free to start.

Start practising →

Original study material mapped to the public SIDC Module 6 syllabus. Unofficial, not endorsed by SIDC or the SC. Verify figures and rules against current guidance before relying on them.