117 - Economic Law - Securities Legal System - Acquisition of Listed Companies: Full Tender Offer or Partial Tender Offer?

(1) Reaching exactly 30% — hitting the brakes When the acquirer’s equity interest in shares reaches 30% of the listed company’s issued shares, any further acquisition must be conducted by issuing either a full tender offer or a partial tender offer to all shareholders of the listed company. However, if the acquirer qualifies for the China Securities Regulatory Commission (CSRC)’s exemption from the obligation to issue a tender offer, it may be exempted from doing so. (2) Exceeding 30% without hitting the brakes If an acquirer intends to acquire more than 30% of a listed company’s shares via agreement, the portion exceeding 30% must be acquired through a tender offer. If the acquirer qualifies for the CSRC’s exemption from issuing a tender offer, it may proceed directly under its acquisition agreement. If it does not qualify for such exemption, the acquirer and its acting-in-concert parties must reduce their (or their controlled shareholders’) holdings in the target company to 30% or below within 30 days; otherwise, they must issue a "full tender offer", thereby triggering the mandatory full tender offer obligation. 3. Indirect acquisition (1) Although not a shareholder of the listed company, if an acquirer—through investment relationships, agreements, or other arrangements—acquires an equity interest exceeding 30% of the company’s issued shares, it must issue a full tender offer to all shareholders of the company. If the acquirer anticipates being unable to issue the full tender offer within 30 days of the occurrence of such fact, it must, within those 30 days, cause its controlled shareholders to reduce their holdings in the listed company to 30% or below, and publicly announce such reduction within two business days after the reduction.

Economic Law Section — Securities Law Chapter 5 — Corporate Acquisitions and Restructuring

• Specific requirements for different trigger points • Upon reaching 5%: Within three days, submit a written report to the CSRC and the stock exchange, notify the listed company, and make a public announcement; no trading in the company’s shares is permitted during these three days. • For each ±5% change: Same obligations as upon first reaching 5%, and no trading in the company’s shares is permitted for three days following the announcement. • For each ±1% change: Notify the listed company and make a public announcement on the next business day; trading in the company’s shares may continue. Example: a. Requirement upon reaching 5%: When Wise Investment first reaches a 5% stake (e.g., purchasing 5 million shares) in Sunshine Technology Co., Ltd., it must file a written report with the CSRC and the stock exchange within three days, simultaneously notify Sunshine Technology and make a public announcement. During these three days, Wise Investment may not buy or sell shares of Sunshine Technology. b. Requirement for each ±5% change: When Wise Investment increases its stake from 5% to 10% (e.g., 10 million shares), it must fulfill the same reporting and announcement obligations as at the initial 5% threshold, and may not trade Sunshine Technology’s shares for three days following the announcement. c. Requirement for each ±1% change: If Wise Investment increases its stake from 10% to 11% (e.g., 11 million shares), it need only notify Sunshine Technology and make a public announcement on the next business day—and may continue trading Sunshine Technology’s shares. (3) Penalties for violations 1. Voting rights restriction: Shares acquired in violation of regulations—i.e., exceeding the prescribed percentage—may not be voted for 36 months following acquisition. 2. Regulatory penalties: Possible sanctions by regulatory authorities, including warnings and fines. 3. Impact on market reputation: May harm the investor’s reputation and credibility in the market. II. Overview of Tender Offers (1) Concept of tender offers A tender offer refers to an acquisition method whereby the acquirer publicly and directly proposes—outside the centralized bidding system of the stock exchange—to purchase shares held by all shareholders of the target company. (2) Characteristics of tender offers Acquisition method Characteristics Price determination Exchange-traded acquisition Conducted within the centralized bidding system of the stock exchange Market price; price fluctuates with market conditions Agreement-based acquisition Conducted outside the centralized bidding system of the stock exchange Negotiated between the acquirer and major shareholders; one-on-one transaction Tender offer Publicly addressed to all shareholders of the target company Uniform price—typically above market price—ensuring fairness to all shareholders (3) Classification of tender offers • By predetermined acquisition ratio: • Full tender offer: An offer to acquire all shares held by all shareholders of the target company. Example: Company A issues a full tender offer to acquire all shares of Listed Company B at RMB 50 per share. • Partial tender offer: An offer to acquire a portion of shares held by all shareholders of the target company. Example: Company C issues a partial tender offer to acquire 25% of the tradable shares of Listed Company D at RMB 45 per share. • By whether the acquisition is mandated by law: • Voluntary tender offer: Initiated voluntarily by the acquirer. Example: Company E voluntarily issues a tender offer to acquire 30% of Listed Company F’s shares at RMB 60 per share. • Mandatory tender offer: Legally required when the acquirer’s shareholding reaches a statutory threshold. Example: Company G holds 29.8% of a listed company’s shares and must issue a mandatory tender offer upon further acquisition.

Sazerac Company Launches Bid for All Berentzen Shares

14 hours ago

US-based Sazerac Company launched a takeover offer for all shares of German spirits manufacturer Berentzen at €5.55 per share, targeting closure in the fourth quarter.

reuters

2026-09-20

Sazerac Company Launches Bid for All Berentzen Shares

Sazerac Company Launches Bid for All Berentzen Shares

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