SIDC Module 6 Take-overs and mergers question: listed company's voting shares

SIDC Module 6Take-overs and mergers

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?

A She has obtained control and must make a mandatory offer for the remaining shares
B She has six months to sell down 1%, and no take-over offer is required
C Nothing yet, as a mandatory offer arises on crossing 50% of the voting shares
D Nothing yet, as she bought less than 5% and so stays within the disclosure limits

Show the answer and explanation

Answer: A. She has obtained control and must make a mandatory offer for the remaining shares

Section 216(1) of the CMSA defines control as holding, or being entitled to exercise, more than 33% of the voting shares or voting rights of a company. Under section 218(2) and Rule 4.01(a) of the Rules on Take-overs, an acquirer who obtains control must make a take-over offer for the remaining voting shares unless the SC grants an exemption. Moving from 30% to 34% crosses the 33% line. More than 50% is statutory control, a different concept. The 5% figure relates to substantial shareholdings, not take-overs. Reducing the holding is an exemption route (Rule 4.11) that must be arranged with the SC before the obligation is triggered (Rule 4.07(1)). Source: CMSA 2007 ss.216(1), 218(2); Rules on Take-overs, Mergers and Compulsory Acquisitions (SC-GL/1-2016 (R2-2021), revised 28 December 2021) paras 4.01(a), 4.07(1), 4.11 (as at October 2026).

Common mistake

Treating 50% as the take-over trigger; in Malaysia control starts above 33%.

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Related SIDC Module 6 questions

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?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?

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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.