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  • Takeover Rules Module (TKO) [VER7/02-16]

    • TKO 1 Introduction and the Takeover Principles

      • TKO 1.1 The takeover rules

        • TKO 1.1.1

          The RulesG in this Module (TKO) comprise the Takeover Rules referred to in the Markets Law 2012.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
          [Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]

        • TKO 1.1.2

          Unless the context otherwise provides, a reference to "Rules" in this Module is a reference to these Takeover Rules.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 1.1.2 Guidance

            1. The RulesG in this Module (TKO) are made in accordance with Article 8 of the Markets Law 2012.
            2. The purpose of these RulesG is set out in Article 51 of the Markets Law 2012, being to:
            a. ensure that a TakeoverG takes place in an efficient, competitive, fair and informed market;
            b. ensure that shareholders are treated fairly and shareholders of the same class are treated the same; and
            c. provide an orderly framework within which a TakeoverG is conducted.
            3. The RulesG throughout this Module are based upon and should be read in conjunction with the Takeover PrinciplesG as prescribed in TKO Section 1.5.
            4. The RulesG are not concerned with the financial or commercial advantages or disadvantages of a TakeoverG . These are matters for the BiddersG and TargetsG and their shareholders.
            5. When there is any doubt whatsoever as to whether a proposed course of conduct is in accordance with the Takeover PrinciplesG or with other more specific RulesG , parties or their advisers should consult the DFSAG in advance to obtain guidance.
            6. TakeoverG transactions may from time to time be subject to the dual jurisdiction of the DFSAG and a regulator of another jurisdiction. In such cases, early consultation should take place with the DFSAG as to how any conflicts between the relevant rules and regulations may be resolved. In appropriate circumstances, a waiver or modification from these RulesG may be appropriate — see the GuidanceG to TKO Chapter 16.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
            [Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]

      • TKO 1.2 Application of these rules

        • TKO 1.2.1

          The RulesG in this Module (TKO) apply to PersonsG to whom the Markets Law 2012 applies, and in particular:

          (a) Reporting EntitiesG as TargetsG or potential TargetsG under the RulesG ;
          (b) BiddersG or potential BiddersG and any PersonG acting in concert with them;
          (c) DirectorsG and officers of TargetsG and BiddersG ; and
          (d) professional advisers in relation to a TakeoverG transaction.
          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
          [Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]

          • TKO 1.2.1 Guidance

            1. The RulesG apply to TakeoverG transactions, however effected, including:
            a. partial BidsG ;
            b. BidsG by a parent entity for SharesG in its subsidiary; and
            c. certain other transactions where control of a Reporting EntityG is to be obtained or consolidated.
            2. Each DirectorG of a BidderG and of the TargetG has a responsibility to ensure, so far as he is reasonably able, that these RulesG are complied with in the conduct of a BidG . Financial advisers have a particular responsibility to comply with the RulesG and to ensure, so far as they are reasonably able, that a BidderG and the TargetG , and their respective DirectorsG , are aware of their responsibilities under the RulesG and will comply with them. Financial advisers should also be mindful of conflicts of interest.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 1.2.2

          Subject to TKO Rule 1.2.3, the RulesG apply to offers or bids for SharesG of a Reporting EntityG , and also to ConvertiblesG , options and subscription rights relating to a Reporting EntityG as provided TKO Section 6.2 of the RulesG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 1.2.3

          The RulesG do not apply in respect of offers or bids for SharesG of a PersonG who is a Reporting EntityG solely by reason of one or more of the following:

          (a) the PersonG has filed a prospectus with the DFSAG under Article 14 of the Markets Law 2012 for the sole purpose of issuing SecuritiesG that:
          (i) are not SharesG nor SecuritiesG that are convertible to SharesG ; and
          (ii) do not confer, directly or indirectly, a voting right;
          (b) the PersonG has or had, at any time, SecuritiesG admitted to an Official List of SecuritiesG where such SecuritiesG :
          (i) are not SharesG nor SecuritiesG that are convertible to SharesG ; and
          (ii) do not confer, directly or indirectly, a voting right; or
          (c) the PersonG merged with or acquired a Reporting EntityG to which, by reason of this RuleG or otherwise, these RulesG do not apply.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
          [Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]

          • TKO 1.2.3 Guidance

            In exceptional cases, the DFSAG may waive or modify the application of the RulesG if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of these RulesG . For example, the DFSAG may, in appropriate circumstances, waive the application of the RulesG in relation to a PersonG who is a Reporting EntityG solely by reason of the DFSAG having declared that the PersonG is a Reporting EntityG .


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 1.3 Regulatory proceedings in the FMT

        • TKO 1.3.1 [Deleted]

          [Deleted] DFSA RM142/2014 (Made 21st August 2014). [VER6/06-14]

        • TKO 1.3.2 [Deleted]

          [Deleted] DFSA RM142/2014 (Made 21st August 2014). [VER6/06-14]

        • TKO 1.3 Guidance

          Article 70(1)(c) of the Markets Law 2012 provides that the FMTG has jurisdiction to hear and determine regulatory proceedings in relation to an issue arising out of a takeover, takeover offer, merger or acquisition of shares. Article 29(3) of the Regulatory LawG sets out who may bring a regulatory proceeding before the FMTG .

          [Added] DFSA RM142/2014 (Made 21st August 2014). [VER6/06-14]

      • TKO 1.4 Interpretation and definitions

        • TKO 1.4.1

          For the purpose of these RulesG , PersonsG , "acting in concert" comprise PersonsG , who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition by any of them of SharesG in a Reporting EntityG , to obtain or consolidate control of that Reporting EntityG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 1.4.1 Guidance

            The DFSAG will presume (without limiting the general application of the definition in the Markets Law 2012) that the following PersonsG will be "acting in concert" with other PersonsG in the same category unless the contrary is established:

            a. any of the following with each other: a company, its parent, subsidiaries and fellow subsidiaries, and their associated companies, and companies of which such companies are associated companies, (for this purpose ownership or control of 20% or more of the equity ShareG capital of a company is regarded as the test of associated company status);
            b. a company with any of its DirectorsG (together with their close relatives and related trusts);
            c. a company with any of its pension funds;
            d. an investment manager with any investment company, unit trust, or other PersonG whose investments such investment manager manages on a discretionary basis, in respect of relevant investment accounts;
            e. a financial or other professional adviser (including a stockbroker) with its client in respect of the Shareholdings of the adviser and PersonsG controlling, controlled by or under the same control as the adviser; and
            f. DirectorsG of a Reporting EntityG which is subject to a BidG or where the DirectorsG have reason to believe a bona fide BidG for their Reporting EntityG may be imminent.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
            [Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]

        • TKO 1.4.2

          For the purpose of these RulesG , a purchase for "cash" includes a contract or arrangement where the consideration consists of a debt instrument capable of being redeemed in less than 3 years.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 1.4.3

          For the purpose of these RulesG , an investment manager or stockbroker will be "connected" with a BidderG or the TargetG , as the case may be, if the investment manager and/or stockbroker is controlled by, controls or is under the same control as:

          (a) a BidderG ;
          (b) the TargetG ;
          (c) any bank or financial or other professional advisers to a BidderG or the TargetG ; or
          (d) an investor in a consortium (for example, through a special purpose vehicle formed for the purpose of making a BidG ).

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 1.4.4

          For the purpose of these RulesG , "control" means a holding, or aggregate holdings, of SharesG carrying 30% or more of the voting rights of a PersonG , irrespective of whether the holding or holdings give de facto control, and includes control arising from acting in concert with another person or other persons.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 1.4.5

          For the purpose of these RulesG , the "posting" of a document is effected by ordinary postal service delivery or by any other process of delivery which is reasonably certain to bring the contents of the document to the attention of the intended individual addressee.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 1.4.6

          For the purpose of these RulesG , a "purchase" or other acquisition of SharesG , where relevant, includes the purchase of SharesG assented to a BidG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 1.4.7

          For the purpose of these RulesG , a "right" over SharesG includes any right acquired by a PersonG by virtue of an agreement to purchase SharesG or an option to acquire SharesG or an irrevocable commitment to accept a BidG to be made by him or an agreement to acquire voting rights or general control of them.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 1.4.8

          For the purpose of these RulesG , a "Securities Exchange BidG " is a BidG in which the consideration includes SecuritiesG of the BidderG or any other PersonG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 1.4.9

          For the purpose of these RulesG , "voting rights" means all the voting rights attributable to the ShareG capital of a Reporting EntityG which are currently exercisable at a general meeting.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 1.4.9 Guidance

            Where a waiver or modification is sought as per GuidanceG Note 1 to TKO Rule 4.1.3, consideration should also be given as to whether the definition of "voting rights" will require consequential modification.


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 1.5 The takeover principles

        • TKO 1.5.1

          All shareholders of a TargetG must be treated fairly by a BidderG and all shareholders of the same class must be treated equally.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 1.5.2

          During the course of a BidG , or when a BidG is contemplated, neither a BidderG , nor a TargetG , nor any of their respective advisers may furnish information to some shareholders which is not available to all shareholders. This principle does not apply to the furnishing of information in confidence by a TargetG or its adviser to a bona fide potential BidderG or its adviser, or vice versa.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 1.5.2 Guidance

            Where information is disclosed in confidence to a BidderG or TargetG , a DirectorG may receive material information in his capacity as DirectorG . That DirectorG , or his associates, may also hold shares in the BidderG or TargetG in a personal capacity. In these circumstances, a DirectorG should be mindful of his duties, including in relation to conflicts of interests and misuse of position. DirectorsG should also be well aware of restrictions and prohibitions under the Markets Law 2012 including Article 42 relating to insider dealing.


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
            [Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]

        • TKO 1.5.3

          A BidderG must only announce a BidG :

          (a) after the most careful and responsible consideration; and
          (b) when the BidderG has every reason to believe that it can and will continue to be able to implement the BidG .

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 1.5.4

          A BidderG and TargetG must:

          (a) give shareholders of the TargetG sufficient time and information to enable them to reach a properly informed decision on a BidG ; and
          (b) not withhold any material information from the shareholders of the TargetG .

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 1.5.5

          Any document or advertisement addressed to shareholders containing information or advice from a BidderG or the TargetG or their respective Governing BodiesG or advisers must be prepared with the highest standards of fairness, care and accuracy.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 1.5.6

          BiddersG and TargetsG must use every endeavour to prevent the creation of a false market in the SecuritiesG of a BidderG or the SharesG of a TargetG . Parties involved in BidsG must take care that statements are not made which may mislead shareholders or the market.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 1.5.7

          At no time after a bona fide BidG has been communicated to the Governing BodyG of a TargetG , or after the Governing BodyG of a TargetG has reason to believe that such a BidG might be imminent, may any action be taken by the Governing BodyG of the TargetG , without the approval of the shareholders in general meeting, which could effectively result in any bona fide BidG being frustrated or in the shareholders being denied an opportunity to decide on its merits.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 1.5.8

          A BidderG and TargetG must exercise rights of control in good faith and without the oppression of a minority.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 1.5.9

          The Governing BodyG of a TargetG must act in the interests of the TargetG as a whole. The shareholders' interests, taken as a whole, must be considered when a Governing BodyG or its DirectorsG are giving advice to shareholders.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 1.5.10

          DirectorsG of a BidderG and the TargetG must, in advising their shareholders, act only in their capacity as DirectorsG and not have regard to their personal or family shareholdings or to their personal relationships with the BidderG or TargetG . DirectorsG of the TargetG must give careful consideration before they enter into any commitment with a BidderG (or anyone else) which would restrict their freedom to advise their shareholders in the future.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 1.5.11

          Where a PersonG (or PersonsG acting in concert) acquires control of a Reporting EntityG , a general BidG to all other shareholders is normally required, and a similar obligation may arise if control is consolidated. Where an acquisition is contemplated as a result of which a PersonG may incur such an obligation, he must, before making the acquisition, ensure that he can and will be able to continue to be able to implement such a BidG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 1.5.12

          All PersonsG concerned with a TakeoverG which is subject to the Takeover Rules must co-operate to the fullest extent with the DFSAG and provide all relevant information.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 1.5.12 Guidance

            1. These Takeover PrinciplesG are prescribed in accordance with Article 53 of the Markets Law 2012. The principles have the full force and effect of RulesG and are therefore binding and enforceable. They are essentially statements of good standards of commercial behaviour. They apply to all transactions with which the Takeover Rules are concerned. They are, however, expressed in broad general terms and the Markets Law 2012 and these RulesG do not define the precise extent of, or the limitations on, their application.
            2. The remaining RulesG in this Module effectively expand upon these Takeover PrinciplesG , and provide examples of their application and make provision governing specific aspects of TakeoverG procedure. Although most of the RulesG are expressed in more detailed language than the Takeover PrinciplesG , they are not framed in technical language and, like the Takeover PrinciplesG , are to be interpreted to achieve their underlying purpose. Therefore, their spirit must be observed as well as their letter and the DFSAG may waive or modify the application of a rule if it considers that, in the particular circumstances of the case, it would operate unduly harshly or in an unnecessarily restrictive or burdensome, or otherwise inappropriate, manner. See Article 9 of the Markets Law 2012 and TKO Chapter 16 of these RulesG .

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
            [Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]

    • TKO 2 The Approach, Announcements and Advice

      • TKO 2.1 The approach

        • TKO 2.1.1

          A PersonG must, in making a BidG or in making an approach with a view to a BidG being made, make such BidG or approach in the first instance to the Governing BodyG of the TargetG or to its duly authorised advisers.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 2.1.2

          If a BidG or approach is made by a PersonG on behalf of an ultimate BidderG or potential BidderG , the PersonG must disclose the identity of the ultimate BidderG or potential BidderG at the outset of making the BidG or approach.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 2.1.3

          A BidderG must, upon receiving a request from the Governing BodyG of the TargetG , provide information reasonably required to verify that the BidderG is, or will be, in a position to implement the BidG in full.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 2.2 Secrecy before announcements

        • TKO 2.2.1

          Before an announcement by which the relevant information is made publicly available, a PersonG privy to confidential information, which constitutes Material InformationG or otherwise, concerning a BidG or contemplated BidG must treat that information as secret and may only pass it to another PersonG if:

          (a) it is necessary to do so; and
          (b) that PersonG is made aware of the need for secrecy.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 2.2.1 Guidance

            Other legislation similarly applies to use and disclosure of confidential information. PersonsG associated with potential TakeoverG transactions should, for instance, be well aware of restrictions and prohibitions under the Markets Law 2012 including Article 58 relating to insider dealing.


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
            [Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]

        • TKO 2.2.2

          A PersonG concerned in a BidG or contemplated BidG must take reasonable steps so as to minimise the chances of an accidental leak of information.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 2.2.2 Guidance

            A BidderG or TargetG should maintain appropriate systems and controls to ensure the maintenance of confidentiality. This may include, for example, maintaining a register of information disclosed and to whom.


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 2.3 Announcement of a possible bid

        • TKO 2.3 Guidance

          An announcement of a possible BidG is intended to preserve the integrity of trading in a Reporting Entity'sG SharesG on the Authorised Market InstitutionG , or any other exchange upon which that entity's SharesG are traded, preceding or during negotiations which may lead to an announcement of a firm intention to make a BidG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 2.3.1

          A potential BidderG must make an announcement of a possible BidG when, before approaching a potential TargetG :

          (a) either:
          (i) the potential TargetG is the subject of rumour and speculation; or
          (ii) there is an abnormal movement in the price of the potential Target'sG SharesG ; and
          (b) there are reasonable grounds to conclude that it is the potential Bidder'sG actions (whether through inadequate security or otherwise) which have led to the situation.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 2.3.1 Guidance

            1. As a consequence of this rule, the potential BidderG should keep a close watch on the potential Target'sG ShareG price for any signs of untoward movement.
            2. The DFSAG should be consulted at the latest when a potential TargetG becomes the subject of any rumour and speculation or where there is a material or abrupt movement in its share price after the time when a BidG is first actively considered.
            3. Additional information may be the subject of a later supplementary announcement.
            4. A potential BidderG should consult with the DFSAG at the earliest opportunity where the requirement to make an announcement pursuant to TKO Rule 2.3.1 may be considered inappropriate. The DFSAG may waive or modify the application of the rule if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of these RulesG .

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 2.3.2

          A TargetG must make an announcement of a possible BidG when, following an approach to it which may or may not lead to a BidG :

          (a) the TargetG is the subject of rumour and speculation; or
          (b) there is an abnormal movement in the price of the Target'sG SharesG ; or
          (c) negotiations or discussions are about to be extended to include more than a very restricted number of PersonsG (outside those in the entities concerned who need to know and their immediate advisers).

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 2.3.2 Guidance

            1. As a consequence of this RuleG , the TargetG should keep a close watch on its ShareG price for any signs of untoward movement.
            2. The DFSAG should be consulted at the latest when the TargetG becomes the subject of any rumour and speculation or where there is a price movement of 10% or more above the lowest ShareG price since the time of the approach. An abrupt price rise of a smaller percentage could also be considered abnormal. In considering whether a price movement is abnormal, the DFSAG may look at a range of factors, including the general market, publicly available information, and the relevant time period.
            3. Additional information may be the subject of a later supplementary announcement.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 2.3.3

          An announcement of a possible BidG must:

          (a) name the potential BidderG ; and
          (b) state that the shareholders concerned should exercise caution in dealing in their SharesG .

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 2.3.3 Guidance

            The announcement of a possible BidG may be brief and couched in general terms and should, in the normal course, state that talks are taking place or that a potential BidderG is considering making a BidG or that an announcement is pending which could have a material effect on the price of the SharesG .


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 2.4 Announcement of a firm intention to make a bid

        • TKO 2.4.1

          A BidderG must make an announcement of a firm intention to make a BidG immediately upon:

          (a) giving any notification to the TargetG as described in TKO Rule 2.4.2; or
          (b) an acquisition of SharesG which gives rise to an obligation to make a Mandatory BidG under TKO Chapter 4 of these RulesG ;

          whichever is the earlier.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 2.4.1 Guidance

            The respective obligations of the TargetG and of the BidderG to make announcements under these RulesG may be satisfied by the making of a joint announcement.


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 2.4.2

          A TargetG must make an announcement when the Governing BodyG of the TargetG has been notified of a firm intention to make a BidG from a serious source, irrespective of the attitude of the Governing BodyG to the BidG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 2.4.3

          An announcement by the BidderG of a firm intention to make a BidG must contain:

          (a) the identity of the BidderG ;
          (b) the principal terms of the BidG ;
          (c) details of any existing holding of SharesG in the TargetG :
          (i) which the BidderG owns or over which it has control;
          (ii) which is owned or controlled by any PersonG acting in concert with the BidderG or in respect of which the BidderG has received an irrevocable commitment to accept the BidG ;
          (iii) in respect of which the BidderG holds an option to purchase; and
          (iv) in respect of which any PersonG acting in concert with the BidderG holds an option to purchase;
          (d) all material conditions (including normal conditions relating to acceptances, listing and increase of capital) to which the BidG or the posting of it is to be subject; and
          (e) details of any arrangement which exists with any BidderG , with the TargetG or with any PersonG acting in concert with the BidderG or with the TargetG in relation to relevant SharesG , whether or not any dealings have taken place.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 2.4.3 Guidance

            The DFSAG may waive or modify the application of TKO Rule 2.4.3 if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of these RulesG .


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 2.4.4

          A BidderG must not:

          (a) make an announcement of a firm intention to make a BidG ; or
          (b) take any action which would give rise to the requirement to make such an announcement;

          unless the BidderG and its financial adviser have proper grounds for believing that the BidderG is and will continue to be able to implement the BidG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 2.4.5

          The announcement of a firm intention to make a BidG containing a whole or partial cash consideration must include confirmation by the financial adviser or by another appropriate third party that resources are available to the BidderG sufficient to satisfy full acceptance of the BidG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 2.4.5 Guidance

            The DFSAG takes the view that the PersonG confirming availability of resources will not be expected to produce the cash itself if, in giving the confirmation, it acted responsibly and took all reasonable steps to assure itself that the cash was available.


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 2.4.6

          When there has been an announcement of a firm intention to make a BidG , the BidderG must proceed with the BidG unless the BidG is subject to the prior fulfilment of a previously disclosed specific condition and that condition has not been fulfilled.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
          [Amended] DFSA RM40/2007 (Made 8th February 2007). [VER2/02-07]

      • TKO 2.5 Announcements in other circumstances

        • TKO 2.5.1

          Where an acquisition of TargetG SharesG by a BidderG or any PersonG acting in concert with it gives rise to obligations under:

          (a) TKO Rule 3.1.1 (acquisitions before a Bid PeriodG ), or
          (b) the RulesG in TKO Chapter 4 (Mandatory BidG ); or
          (c) TKO Rule 5.2.1 (requirement for a BidG in cash),

          an appropriate announcement must be made immediately after such an acquisition.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 2.5.2

          Whenever practicable, the announcement must also state the number of SharesG acquired and the consideration paid.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 2.6 Mode of publication of an announcement

        • TKO 2.6.1

          An announcement under TKO Section 2.3, TKO Section 2.4 or TKO Section 2.5 must be published in the same manner as a market disclosure required under MKT Rule 4.7.1.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
          [Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]

          • TKO 2.6.1 Guidance

            An announcement should not be delayed while full information is being obtained. Additional information may be the subject of a later supplementary announcement.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
            [Amended] DFSA RM63/2008 (Made 4th January 2009). [VER4/01-09]
            [Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]

      • TKO 2.7 Governing bodies to obtain independent advice

        • TKO 2.7 Guidance

          1. TKO Rule 2.7.1 and TKO Rule 2.7.2 require the Target'sG adviser to have a sufficient degree of independence from the TargetG to ensure the advice given is properly objective. In certain circumstances it may not be appropriate for a PersonG who has had a recent advisory relationship with a BidderG to give advice to a TargetG . Additionally, the DFSAG would consider a PersonG who has a significant interest in or financial connection with either a BidderG or the TargetG of such a kind as to create a conflict of interest.
          2. The requirement for competent independent advice is of particular importance where the BidG is a management buyout or similar transaction or is being made by the existing controlling shareholder or group of shareholders. In any such cases, the independence of the adviser must be beyond question.
          3. The DFSAG should be consulted if there is any potential of a contravention of these Rules TKO 2.7.1 and TKO 2.7.2. The DFSAG may waive or modify the application of the RulesG if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of these RulesG .

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 2.7.1

          The Governing BodyG of a BidderG must:

          (a) obtain competent independent advice on any BidG when the BidG being made is a reverse TakeoverG or when the DirectorsG are faced with a conflict of interest; and
          (b) make known the substance of such advice to its shareholders early enough to enable them to make a timely and informed decision on the merits of the BidG .

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 2.7.1 Guidance

            When the Governing BodyG of a BidderG is required to obtain competent independent advice, it should do so before announcing its BidG or any revised BidG . Such advice should be as to whether or not the making of the BidG is in the interests of the Bidder'sG shareholders. Shareholders should have sufficient time to consider advice given to them prior to any general meeting held to implement the proposed BidG .


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 2.7.2

          The Governing BodyG of a TargetG must:

          (a) obtain competent independent advice on any BidG including as to how it affects all shareholders; and
          (b) make known the substance of such advice to its shareholders early enough to enable them to make a timely and informed decision on the merits of the BidG .

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 2.7.2 Guidance

            In obtaining advice as to how a BidG affects all shareholders, consideration should specifically be given to the effect on minority shareholders or classes of shareholders, where applicable. It is expected that the substance of any such advice will be summarised in the Target CircularG . See Sections TKO 8.1 and TKO 8.2 of the RulesG .


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO 3 Restricted Dealings Before and During an Offer Period

      • TKO 3.1 Acquisitions before a bid period

        • TKO 3.1.1

          Subject to Rules TKO 4.3.1 and TKO 5.2.1, when a BidderG or any PersonG acting in concert with it has acquired SharesG in the TargetG :

          (a) within the six month period prior to the commencement of the Bid PeriodG ; or
          (b) during the period, if any, between the commencement of the Bid PeriodG and an announcement made by the BidderG in accordance with TKO Section 2.4;

          the BidG to the shareholders of the same class must not be on less favourable terms.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 3.2 Acquisitions during a bid period

        • TKO 3.2.1

          If, after the commencement of the Bid PeriodG and before the BidG closes for acceptance, a BidderG or any PersonG acting in concert with it acquires relevant SharesG in the TargetG at above the BidG price (being the then current BidG price), the BidderG must revise its BidG to not less than the highest price paid for the SharesG so acquired.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 3.2.2

          Immediately after the acquisition, the BidderG must make an announcement that a revised BidG will be made in accordance with TKO Rule 3.2.1.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 3.2.3

          The announcement must also state the number of SharesG acquired and the price paid.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 3.3 Restrictions on the sale of shares during a bid period

        • TKO 3.3.1

          During a Bid PeriodG , the BidderG and PersonsG acting in concert with it must not sell any SecuritiesG in the TargetG .

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
          [Amended] DFSA RM40/2007 (Made 8th February 2007). [VER2/02-07]

          • TKO 3.3.1 Guidance

            1. As a matter of course, the DFSAG will not waive the requirements under TKO Rule 3.3.1 for sales where a Mandatory BidG under TKO Chapter 4 is being made.
            2. Where the DFSAG grants a waiver from this requirement, it may:
            a. require a period of prior public notice that sales might be made; and
            b. impose a restriction that after notice has been given that sales may be made, neither the BidderG nor PersonsG acting in concert with it may make further purchases.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 3.4 Disclosure of dealings during a bid period

        • TKO 3.4.1

          Dealings in relevant SecuritiesG during a Bid PeriodG by the BidderG or the TargetG , and by any PersonG acting in concert, for:

          (a) their or his own account; or
          (b) the account of clients;

          must be disclosed forthwith by the PersonG concerned:

          (c) to the DFSAG ; and
          (d) in the same manner as a market disclosure required under Rule 4.7.1 of the Markets Rules.
          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
          [Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]

          • TKO 3.4.1 Guidance

            Where two or more persons act pursuant to an agreement or understanding, whether formal or informal, to acquire or control relevant SecuritiesG , the DFSAG will treat them as a single person for the purpose of this RuleG .


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 3.4.2

          Disclosure of dealings in relevant SecuritiesG of a BidderG is only required following:

          (a) an announcement of a Securities Exchange BidG ; or
          (b) an earlier commencement of a Bid PeriodG if it has not been announced that any BidG is likely to be solely in cash.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 3.4.3

          A disclosure pursuant to TKO Rule 3.4.1 must, at least:

          (a) provide the total number of the relevant SecuritiesG purchased or sold;
          (b) provide the total number of the respective dealings for the Person'sG own account and for the account of clients;
          (c) detail the prices paid or received;
          (d) identify the PersonG dealing.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 3.4.4

          For the purpose of the RulesG in this Section, "relevant SecuritiesG " include:

          (a) SecuritiesG of the TargetG which are subject to a BidG or which carry voting rights;
          (b) equity ShareG capital of the BidderG and the TargetG ;
          (c) SecuritiesG of a BidderG which carry substantially the same rights as any to be issued as consideration for a BidG ;
          (d) SecuritiesG of BidderG and the TargetG carrying conversion or subscription rights into any of the above;
          (e) options in respect of any of the foregoing and derivatives materially referenced to any of the foregoing.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 3.4.4 Guidance

            In the case of investment accounts managed on a discretionary basis, relevant SecuritiesG or SharesG so managed will be treated, for the purpose of this RuleG , as controlled by that manager and not by the PersonG on whose behalf the relevant SecuritiesG or SharesG are managed.


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO 4 Mandatory Bids

      • TKO 4.1 Requirement for a mandatory bid

        • TKO 4.1.1

          Subject to TKO Rule 4.1.2, when:

          (a) any PersonG acquires, whether by a series of transactions over a period of time or not, SharesG which carry 30% or more of the voting rights of a Reporting EntityG ;
          (b) two or more PersonsG are acting in concert, and they collectively hold SharesG which carry less than 30% of the voting rights of a Reporting EntityG , and any one or more of them acquires SharesG and such acquisition has the effect of increasing to 30% or more their collective holding of SharesG carrying voting rights of the Reporting EntityG ;
          (c) any PersonG holds not less than 30% of SharesG carrying voting rights of a Reporting EntityG and such PersonG acquires additional SharesG and such acquisition has the effect of increasing that person's holding of SharesG carrying voting rights by more than 3% from the lowest percentage holding of that PersonG in the 12 month period ending on and inclusive of the date of the relevant acquisition; or
          (d) two or more PersonsG are acting in concert, and they collectively hold not less than 30% of SharesG carrying voting rights of a Reporting EntityG , and any one or more of them acquires additional SharesG and such acquisition has the effect of increasing their collective holding of SharesG carrying voting rights by more than 3% from the lowest percentage holding of such PersonsG in the 12 month period ending on and inclusive of the date of the relevant acquisition;

          such PersonG must extend BidsG under these RulesG to the holders of any class of equity ShareG capital, whether voting or non-voting, and also to the holders of any class of voting non-equity ShareG capital of which such PersonG , or PersonsG acting in concert with him, hold SharesG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 4.1.1 Guidance

            1. Under Article 9 of the Markets Law 2012 the DFSAG may waive or modify the application of the Markets Law 2012 or of the RulesG .
            2. Where an obligation to make a Mandatory BidG arises as a consequence of PersonsG acting in concert, the DFSAG should be consulted at the earliest opportunity to determine, where appropriate, which PersonG or PersonsG should mount the BidG and consequently whether any waiver or modification from this RuleG is appropriate. The DFSAG may, for example, require the BidG to be made by the PersonG who acquired the shares which triggered the obligation under TKO Rule 4.1.1 to make the Mandatory BidG .
            3. A definition of "acting in concert" is provided in TKO Rule 1.4.1. As a consequence of that definition, TKO Rule 4.1.1 may require a BidG to be made even when no single PersonG in a group acting in concert holds 30% or more of the voting rights.
            4. Where a PersonG acquires shares independently from other shareholders, and subsequently groups together with other shareholders to co-operate or to consolidate control of a Reporting EntityG , and their existing shareholdings amount to 30% or more of the voting rights in the Reporting EntityG , the DFSAG would not normally require a BidG to be made under TKO Rule 4.1.1. However, having once joined together, TKO Rule 4.1.1 may apply. For example, a Mandatory BidG may be required when a member of the group acquires further shares carrying voting rights such that the total of the groups holdings reach 30% or more.
            5. The DFSAG will entertain an application for waiver or modification relating to the amount of permissible creep under TKO Rule 4.1.1(c) or (d) only in exceptional circumstances. Without in any way limiting the DFSA'sG discretion, such a circumstance may include where there is a dilution of voting rights by the issue of new shares or otherwise and it is appropriate to net off the dilution against acquisitions.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
            [Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]

        • TKO 4.1.2

          TKO Rule 4.1.1 does not apply in relation to an acquisition of SharesG of a Reporting EntityG which is the result of:

          (a) exercise of a right conferred by law of a minority shareholder to have his shareholding compulsorily acquired by a BidderG ; or
          (b) exercise of a right conferred by law of a BidderG to compulsorily acquire the shareholding of a minority shareholder.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 4.1.2 Guidance

            1. An example of a right described in TKO rule 4.1.2(a) appears in Article 85 of the Companies Law.
            2. Provisions described in TKO Rule 4.1.2(b) are commonly referred to as "squeeze-out" or "mopping-up" provisions. See for example Article 83 of the Companies Law.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 4.1.3

          BidsG for different classes of equity ShareG capital must be fair and appropriate, having regard to current circumstances, and the DFSAG must be consulted in advance in such cases.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 4.1.3 Guidance

            1. The DFSAG may waive or modify the application of the RulesG if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of these RulesG .
            2. When the issue of new SharesG as consideration for an acquisition or a cash subscription would otherwise result in an obligation to make a Mandatory BidG under the RulesG in this TKO Chapter 4, the DFSAG will normally dispense with such obligation if there is a waiver thereof by a majority of independent votes at a meeting of the shareholders. The requirement for a Mandatory BidG will also be dispensed with, provided there has been a majority of independent votes at a properly constituted meeting of shareholders, in cases involving the underwriting of an issue of SharesG . The DFSAG may in its discretion grant a dispensation in cases where an underwriter incurs an obligation under these RulesG unexpectedly, for example as a result of an inability to obtain sub-underwriters for all or part of his liability. Where a waiver or modification is granted as per this GuidanceG , consideration should also be given as to whether the definition of "voting rights" in TKO Section 1.4 will require consequential modification.
            3. Notwithstanding the fact that, at a general meeting of the Reporting EntityG , the issue of new SharesG is made conditional upon the prior approval of a majority of votes of shareholders independent of the transaction:
            a. the DFSAG will not normally dispense with an obligation under this Section if the PersonG to whom the new SharesG are to be issued or any PersonsG acting in concert with him have acquired relevant SharesG in the TargetG in the 12 months prior to the posting of the Bid DocumentG but subsequent to negotiations, discussions or the reaching of understandings or agreements with the DirectorsG of the TargetG in relation to the proposed issue of new SharesG ;
            b. a waiver by independent votes shall be invalidated if any acquisitions are made in the period between the posting of the Bid DocumentG to the shareholders and the meeting.
            4. The DFSAG may dispense with the requirement of a Mandatory BidG where the approval of independent votes to the transfer of existing SharesG from one holder to another is obtained.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 4.2 Conditions and consents

        • TKO 4.2.1

          A Mandatory BidG made under these RulesG must be conditional only upon the BidderG having received acceptances in respect of SharesG which, together with SharesG acquired or agreed to be acquired before or during the BidG , will result in the BidderG and any PersonG acting in concert with it holding SharesG carrying more than 50% of the voting rights.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 4.2.2

          No acquisition of SharesG which would give rise to a requirement for a Mandatory BidG under these RulesG may be made if the making or implementation of such BidG would or might be dependent on the passing of a resolution at any meeting of shareholders of the BidderG or upon any other conditions, consents or arrangements.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 4.3 Consideration to be offered

        • TKO 4.3.1

          Mandatory BidsG made under these RulesG must, in respect of each class of SharesG involved, be in cash or be accompanied by a cash alternative at not less than the highest price paid by the BidderG or any PersonG acting in concert with it for SharesG of that class during the Bid PeriodG and within the preceding six months.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 4.3.1 Guidance

            1. If the BidderG considers that the highest price should not apply in a particular case, the BidderG should consult the DFSAG . The DFSAG may waive or modify the application of TKO Rule 4.3.1 if it is satisfied that circumstances are appropriate to provide a dispensation from this RuleG . See TKO Chapter 16 of these RulesG . Factors that the DFSAG may take into account include the size or timing of the relevant acquisitions, the attitude of the Governing BoardG of the TargetG , whether SharesG had been purchased at high prices from DirectorsG or other PersonsG closely connected with the BidderG or TargetG , and the number of SharesG purchased in the preceding six months.
            2. The DFSAG should be consulted where there is more than one class of SharesG involved.
            3. Also note related provisions, TKO Rule 3.1.1 (acquisitions before a Bid PeriodG ) and TKO Rule 5.2.1 (requirement for a BidG in cash).

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 4.3.2

          The cash BidG or any cash alternative must remain open after the BidG has become or is declared unconditional as to acceptances for not less than 14 days after the date on which it would otherwise have expired.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 4.4 Obligations of directors selling shares

        • TKO 4.4.1

          When a DirectorG of a Reporting EntityG sells SharesG owned or controlled by him in that Reporting EntityG to an identifiable purchaser as a result of which the purchaser is required to make a BidG under the RulesG in this Chapter, such DirectorG must stipulate as a condition of the sale that the purchaser undertakes to fulfil his obligations under the RulesG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 4.4.2

          In addition, such DirectorG must not resign from the Governing BodyG until the first closing date of the BidG or the date upon which the BidG becomes or is declared unconditional, whichever is the later.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 4.5 Restrictions on exercise of control by a bidder

        • TKO 4.5.1

          No nominee of a BidderG or PersonsG acting in concert with it may be appointed to the Governing BodyG of the TargetG , nor may a BidderG and PersonsG acting in concert with it exercise the votes attaching to any SharesG held in the TargetG , until the Bid DocumentG has been posted.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO 5 The Terms of a Voluntary Bid

      • TKO 5.1 The acceptance condition

        • TKO 5.1.1

          It must be the condition of any BidG for voting equity ShareG capital which, if accepted in full, would result in the BidderG holding SharesG carrying over 50% of the voting rights of the TargetG , that the BidG will not become or be declared unconditional as to acceptances unless the BidderG has acquired or agreed to acquire (either pursuant to the BidG or otherwise) SharesG carrying over 50% of the voting rights attributable to:

          (a) the equity ShareG capital alone; and
          (b) the equity ShareG capital and the non-equity ShareG capital combined.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 5.2 Requirement for a bid in cash

        • TKO 5.2.1

          Where the SharesG of any class under BidG in the TargetG acquired for cash by a BidderG or any PersonG acting in concert with it during the Bid PeriodG , or within six months prior to its commencement, carry 10% or more of the voting rights currently exercisable at a class meeting of that class, the BidG for that class must be in cash or accompanied by a cash alternative at not less than the highest price paid by the BidderG or any PersonG acting in concert with it for SharesG of that class during the Bid PeriodG or within six months prior to its commencement.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 5.2.1 Guidance

            1. The DFSAG may waive or modify the application of TKO Rule 5.2.1 if it is satisfied that circumstances are appropriate. For example, if the BidderG considers that the highest price ought not to apply in a particular case, it must consult the DFSAG , which may grant a waiver or modification to reflect an adjusted price. See TKO Chapter 16 of these RulesG .
            2. Also note related provisions TKO Rule 3.1.1 (acquisitions before a Bid PeriodG ) and TKO Rule 4.3.1 (consideration to be offered in a Mandatory BidG ).

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 5.3 Subjective conditions

        • TKO 5.3.1

          Subject to prior consent of the DFSAG , a BidG shall not be subject to conditions which depend solely on subjective judgements by the DirectorsG of the BidderG or the fulfilment of which is in their hands.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 5.3.1 Guidance

            1. The DFSAG may be prepared to accept an element of subjectivity in certain special circumstances where it is not practicable to specify all the factors on which satisfaction of a particular condition may depend. This may especially arise in cases involving official authorisations, the granting of which may be subject to an additional material obligation of the BidderG . Consent would also normally be granted where an announcement for a BidG is to be expressed as being conditional on statements or estimates being appropriately verified.
            2. A BidderG should not invoke any condition, other than the acceptance condition, so as to cause the BidG to lapse unless the circumstances which give rise to the right to invoke the condition are of material significance to the BidderG in the context of the BidG .
            3. Conditions that depend solely on a force majeure are not prohibited by this RuleG .

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO 6 Provisions Applicable to All Bids

      • TKO 6.1 Where there is more than one class of shares

        • TKO 6.1.1

          Where a TargetG has more than one class of SharesG as its capital, the BidderG must:

          (a) make a fair and appropriate BidG , having regard to current circumstances, for each class whether such capital carries voting rights or not;
          (b) consult the DFSAG in advance of such a BidG being made; and
          (c) ensure that a BidG for non-voting SharesG is not conditional on any particular level of acceptances in respect of that class unless the BidG for the voting SharesG is also conditional on the success of the BidG for the non-voting SharesG .

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 6.1.1 Guidance

            A fair and appropriate BidG need not necessarily be an identical BidG .


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 6.1.2

          Classes of non-equity ShareG capital need not be the subject of a BidG , except in the circumstances referred to in TKO Rule 4.1.1.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 6.1.3

          Where a BidG is made for more than one class of SharesG , separate BidsG must be made for each class.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 6.2 Appropriate bid for options, convertibles and rights

        • TKO 6.2.1

          When a BidG is made for SharesG and the TargetG has:

          (a) issued options conferring a right to acquire SharesG ;
          (b) issued ConvertiblesG conferring a right to convert a SecurityG into SharesG ; or
          (c) issued subscription rights conferring a right to subscribe for SharesG ;

          which remain outstanding, the BidderG must make a BidG or proposal to the holders of each such category of options, ConvertiblesG or subscription rights.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 6.2.2

          A BidG or proposal under TKO Rule 6.2.1 must, in relation to the holders in each such category:

          (a) be fair and appropriate;
          (b) provide equal treatment; and
          (c) ensure that their interests are safeguarded.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 6.3 Special deals with favourable conditions

        • TKO 6.3.1

          A BidderG or PersonsG acting in concert with it must not make any arrangements with shareholders and must not deal or enter into arrangements to deal in SharesG of the TargetG , or enter into arrangements which involve acceptance of a BidG , either during a BidG or when one is reasonably in contemplation, if there are favourable conditions attached which are not being extended to all shareholders.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 6.3.1 Guidance

            The DFSAG may waive or modify the application of TKO Rule 6.3.1 if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of these RulesG .


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 6.4 Announcement of acceptance levels

        • TKO 6.4.1

          By 9:00am (Dubai time) at the latest on the business day following the day on which a BidG is due to expire, or becomes or is declared unconditional as to acceptances, or is extended, the BidderG must make an appropriate announcement including an announcement made in the same manner as a market disclosure required under Rule 4.7.1 of the Markets Rules.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
          [Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]

        • TKO 6.4.2

          The announcement must state the total numbers of SharesG and rights over SharesG (as nearly as practicable);

          (a) for which acceptances of the BidG have been received;
          (b) held before the Bid PeriodG ; and
          (c) acquired or agreed to be acquired during the Bid PeriodG ;

          and must specify the percentages of the relevant classes of SharesG represented by these numbers.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 6.4.2 Guidance

            1. See also TKO Rule 11.2.2.
            2. If, during a BidG , any statements are made by a BidderG or its advisers about the level of acceptances of the BidG or the number or percentages of shareholders who have accepted the BidG , an immediate announcement must be made in conformity with these RulesG .
            3. If a BidderG fails within the time limit to comply with the requirements in this Section, the DFSAG or Authorised Market InstitutionG (as appropriate) may consider a temporary suspension of listing of the Target'sG SharesG and, where appropriate, the Bidder'sG SharesG until the relevant information is given.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 6.5 Use of proxies and authorities in relation to acceptances

        • TKO 6.5.1

          A BidderG must not require the shareholders of the TargetG , as a term of his acceptance of a BidG , to appoint a proxy to vote in respect of those SharesG or to appoint a particular PersonG to exercise any other rights or take any other action in relation to those SharesG unless the appointment is on the following terms, which must be set out in the Bid DocumentG :

          (a) the proxy may not vote, the rights may not be exercised and no other action may be taken unless the BidG is wholly unconditional or, in the case of voting by the proxy, the BidG will become wholly unconditional or lapse immediately upon the outcome of the resolution in question;
          (b) where relevant, the votes are to be cast as far as possible to satisfy any outstanding condition of the BidG ;
          (c) the appointment ceases to be valid if the acceptance is withdrawn; and
          (d) the appointment applies only to SharesG in respect of which there is an acceptance of the BidG .

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO 7 Conduct During a Bid

      • TKO 7.1 Standards and responsibilities for care and accuracy

        • TKO 7.1.1

          A BidderG and the TargetG , respectively, must ensure that each document or advertisement issued, or statement made, by them or on their behalf during the course of a BidG :

          (a) satisfies the highest standards of accuracy;
          (b) adequately and fairly presents any information contained in it; and
          (c) will not mislead shareholders and the market or create uncertainty.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 7.1.1 Guidance

            1. This RuleG applies whether the document, advertisement or information is issued directly by the BidderG or TargetG or by an adviser on their behalf.
            2. Campaigns in which shareholders are contacted by telephone should be conducted only by staff of the financial advisers who are fully conversant with the requirements of and their responsibilities under the RulesG . Only previously published information which remains accurate, and is not misleading at the time it is quoted, should be used in telephone campaigns. Shareholders should not be put under pressure and should be encouraged to consult their professional advisers.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 7.1.2

          Each document issued to shareholders or advertisements published in connection with a BidG , in which there is a material expression of opinion must state that the DirectorsG of the BidderG and/or, where appropriate, the TargetG , accept responsibility for the information contained in the document or advertisement and that to the best of their knowledge and belief (having taken all reasonable care to ensure that such is the case) the information contained in the document or advertisement is in accordance with the facts and, where appropriate, that it does not omit anything likely to affect the import of such information.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 7.1.3

          If it is proposed that any DirectorG shall be excluded from such a statement referred to in TKO Rule 7.1.2, the omission and the reasons for it must be stated in the document or advertisement.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 7.2 Distribution of documents and announcements

        • TKO 7.2.1

          Copies of all relevant documents and announcements bearing on a BidG , and of advertisements and any material to be released to the media, must at the time of release be filed with the DFSAG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 7.2.1 Guidance

            The time of filing of Bid DocumentsG and Target CircularsG with the DFSAG is addressed in TKO Section 11.1.


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 7.2.2

          Copies of all relevant documents and announcements when issued or made must also be made available at the same time to the advisers to all other parties to the BidG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 7.3 Equality of information

        • TKO 7.3.1

          Subject to TKO Rule 7.3.2, information about entities involved in a BidG must be made equally available to all shareholders as nearly as possible at the same time and in the same manner.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 7.3.2

          TKO Rule 7.3.1 does not apply to:

          (a) the furnishing of information in confidence by a TargetG to a bona fide potential BidderG or vice versa; or
          (b) the issue of circulars to their own investment clients by brokers or advisers to any party to the transaction.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 7.3.3

          Any information, including particulars of shareholders, given to one BidderG or potential BidderG , must, on request, be furnished equally and as promptly to another BidderG or bona fide potential BidderG , even if that other BidderG is less welcome.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 7.3.4

          If the BidG or potential BidG is for a management buy-out or similar transaction, the BidderG or potential BidderG must, on request, forthwith furnish the independent DirectorsG of the TargetG or its advisers with all information which has been furnished by the BidderG or potential BidderG to external providers or potential providers of finance (whether equity or debt) for the buy-out.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 7.4 Restrictions on frustrating action

        • TKO 7.4.1

          During the course of a BidG , or even before the date of the BidG if the Governing BodyG of the TargetG has reason to believe that a bona fide BidG might be imminent, the Governing BodyG must not, except in pursuance of a contract entered into earlier, without the approval of the shareholders to the relevant proposal given in general meeting:

          (a) issue any authorised but unissued SharesG ;
          (b) issue or grant options in respect of any unissued SharesG ;
          (c) create or issue, or permit the creation or issue of, any SecuritiesG carrying rights of conversion into or subscription for SharesG ;
          (d) sell, dispose of or acquire, or agree to sell, dispose of or acquire, assets of a material amount;
          (e) enter into contracts otherwise than in the ordinary course of business; or
          (f) pay any dividend which is abnormal as to timing and amount.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 7.4.2

          The notice convening the general meeting of shareholders must include information about the BidG or contemplated BidG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 7.4.3

          Where it is considered that an obligation or other special circumstance already exists, although a formal contract has not been entered into, the DFSAG must be consulted and its consent obtained to proceed without a meeting of shareholders.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO 8 Documents Issued by Governing Bodies

      • TKO 8.1 The general obligation as to information

        • TKO 8.1.1

          The Governing BodiesG of the BidderG and TargetG must give sufficient information and advice to the shareholders of the TargetG to enable them to reach a properly informed decision as to the merits of a BidG . Such information must be made available to such shareholders early enough to enable them to make a timely and informed decision.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 8.1.2

          The Governing BodiesG of BidderG and TargetG must make timely disclosure of all statements, notices, declarations and other documents such as the Bid DocumentG and the Target CircularG in the same manner as a market disclosure under Rule 4.7.1 of the Markets Rules.

          [Added] DFSA RM40/2007 (Made 8th February 2007). [VER2/02-07]
          [Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]

          • TKO 8.1.2 Guidance

            This provision applies Rule 4.7.1 of the Markets Rules in respect of the BidderG and TargetG to a takeover regardless of whether they are Reporting EntitiesG . For the avoidance of doubt, specific obligations to make disclosure are also contained in Rules TKO 2.6.1, and TKO 3.4.1.

            [Added] DFSA RM40/2007 (Made 8th February 2007). [VER2/02-07]
            [Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]

      • TKO 8.2 Bid document and target circular disclosures

        • TKO 8.2.1

          In its Bid DocumentG , the BidderG must disclose the information specified in TKO App1, together with any other relevant information to enable the Target'sG shareholders to reach a properly informed decision.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 8.2.2

          The Governing BodyG of the TargetG must circulate its views on the BidG , including any alternative BidsG , to its shareholders in a Target CircularG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 8.2.2 Guidance

            Nothing in these RulesG precludes a BidderG and a TargetG issuing a joint document under which they comply with their respective obligations.


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 8.2.3

          In its initial Target CircularG , the Governing BodyG of the TargetG must disclose the information specified in TKO App2 (whether recommending acceptance or rejection of the BidG ), together with any other information it considers to be relevant to enable its shareholders to reach a properly informed decision on the BidG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 8.3 Documents subsequently sent to shareholders

        • TKO 8.3.1

          Documents subsequently sent to shareholders of the TargetG by either the BidderG or TargetG during the Bid PeriodG must contain the information specified in TKO App3.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 8.4 Availability of documents for inspection

        • TKO 8.4.1

          Where a BidderG or TargetG :

          (a) has prepared or possesses any document prescribed in TKO Rule 8.4.2; or
          (b) has referred to or relied upon any document prescribed in TKO Rule 8.4.2 in its Bid DocumentG or Target CircularG ;

          the BidderG or TargetG respectively must make any such document available for inspection from the time the Bid DocumentG or Target CircularG , as appropriate, is published until the end of the Bid PeriodG . The Bid DocumentG or Target CircularG must state which documents are so available and the place in the DIFCG where inspection can be made.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 8.4.2

          The following documents are prescribed for the purposes of TKO Rule 8.4.1:

          (a) Where a profit forecast has been made:
          (i) the reports of the auditors or reporting accountants (TKO Rule 9.4.1); and
          (ii) the letters giving the consents of the auditors or reporting accountants and appropriate external valuers to the issue of the relevant document, with the report in the form and context in which it is included or, if appropriate, to the continued use of the report in a subsequent document (TKO Rule 9.4.4 and TKO Rule 9.6.1).
          (b) Where an asset valuation has been made:
          (i) the valuation certificate and associated report or a schedule containing details of the aggregate valuation (TKO Section 10.2); and
          (ii) a letter stating that the valuer has given and not withdrawn his consent to the publication of his valuation certificate in the form and context in which it is included in the relevant document.
          (c) Any document evidencing an irrevocable commitment to accept a BidG or any arrangement, undertaking or agreement relating to the commitment to accept a BidG or to the circumstances in which the BidderG may or may not invoke or seek to invoke a condition to its BidG .
          (d) The memorandum and articles of association of the TargetG , and where there is a Securities Exchange BidG , also of the BidderG .
          (e) The annual financial statements of the TargetG , and, where there is a Securities Exchange BidG , also the BidderG for the last three completed financial years in respect of which audited annual financial statements have been issued.
          (f) Any other document materially relied upon in the Bid DocumentG or Target CircularG .

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 8.4.2 Guidance

            The DFSAG may waive or modify the application of certain provisions of this TKO Section 8.4 if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of these RulesG .


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO 9 Profit Forecasts

      • TKO 9.1 References to profit forecasts

        • TKO 9.1.1

          A reference in this TKO Section 9 to:

          (a) a "profit forecast" includes a forecast of loss; and
          (b) a "profit" includes a loss.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 9.2 Standards of care

        • TKO 9.2.1

          When a profit forecast is to be given by a BidderG or TargetG to shareholders, the DirectorsG of the respective BidderG or TargetG :

          (a) are responsible for the compilation of the profit forecast; and
          (b) in so doing, must compile the forecast with the highest standards of objectivity, care and accuracy.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 9.2.1 Guidance

            The hazards attached to the forecasting of profits must in no way detract from the necessity of maintaining the highest standards of accuracy and fair presentation in all communications to shareholders in a BidG .


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 9.3 Assumptions

        • TKO 9.3.1

          When a profit forecast appears in any document addressed to shareholders in connection with a BidG , the material assumptions, including the commercial assumptions, upon which the DirectorsG have based their profit forecast, must be stated and explained in the document.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 9.3.2

          When, after a Bid DocumentG has been posted, a profit forecast is given in a public announcement (whether by newspaper or any other means of publication), any assumptions on which the forecast is based must be included in the announcement.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
          [Amended] RM164/2015 (Made 9th December 2015). [VER7/02-16]

      • TKO 9.4 Reports in connection with profit forecasts

        • TKO 9.4.1

          In all cases, the assumptions, accounting policies and calculations for a profit forecast must be examined and reported on by the auditors or reporting accountants.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 9.4.2

          When income from land and buildings is a material element in a profit forecast, that part of the forecast must be examined and reported on by an independent external valuer. This RuleG does not apply where the income is virtually certain, for example, known rents receivable under existing leases.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 9.4.3

          Any relevant profit forecast which has been made before the commencement of the Bid PeriodG must be examined, repeated and reported on in the document sent to shareholders.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 9.4.3 Guidance

            The DFSAG may waive or modify the application of TKO Rule 9.3.3 if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of these RulesG . In exceptional circumstances, the DFSAG may accept that, because of the uncertainties involved, it is not possible for a forecast previously made to be reported on in accordance with the RulesG nor for a revised forecast to be made. In these circumstances, shareholders must be given a full explanation of why the requirements of the RulesG are not capable of being met.


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 9.4.4

          When a Bid DocumentG has been posted, the reports shall be included in the document containing the forecast or, when the forecast has been made in a public announcement (whether by newspaper or any other means of publication), in a document which shall be sent to shareholders with a minimum of delay after the announcement is published. The reports must be accompanied by a statement that those making them have given and not withdrawn their consent to publication.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 9.5 Statements to be treated as profit forecasts

        • TKO 9.5.1

          The following statements must be treated as profit forecasts:

          (a) an estimate of profit for a period which has already expired;
          (b) a profit forecast for a limited period (for example, for the following quarter); and
          (c) any unaudited interim and preliminary profit figures published during a Bid PeriodG , excepting unaudited statements of annual or interim results which have already been published.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 9.5.1 Guidance

            1. When no figure is mentioned, or even if the word "profit" is not used, the DFSAG may consider that certain forms of words constitute a profit forecast, particularly when considered in context. Examples include statements that "profits will be somewhat higher than last year" and "performance in the second half year is expected to be similar to our performance and results in the first half year" (when interim figures have already been published). Whenever a form of words puts a floor under, or a ceiling on, the likely profits of a particular period or contains the data necessary to calculate an approximate figure for future profits, it will be treated by the DFSAG as a profit forecast which must be reported on in accordance with this RuleG . In cases of doubt the DFSAG must be consulted.
            2. A dividend forecast will not normally be considered a profit forecast unless, for example, it is accompanied by an estimate as to dividend cover.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 9.6 Miscellaneous rules relating to forecasts

        • TKO 9.6.1

          When a BidderG or TargetG includes a forecast in a document, any document subsequently sent out by that entity in connection with that BidG must contain a statement by the DirectorsG that:

          (a) the forecast remains valid for the purpose of the BidG ; and
          (b) the accountants and others who reported on the forecast have indicated that they have no objection to their reports continuing to apply.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 9.6.2

          When a forecast of profit before taxation appears in a document addressed to shareholders, it must be accompanied by a forecast of earnings per ShareG arising from the profit.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 9.6.3

          Whenever a profit forecast is made in relation to a period in which trading has already commenced, any previously published profit figures in respect of any expired part of that trading period, together with comparable figures for the same part of the preceding year, must be stated.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 9.6.4

          All the relevant provisions of this Section apply also to a profit forecast prepared on an inflation-adjusted basis, in which case:

          (a) the basis of computation underlying such a forecast must be stated; and
          (b) the forecast must be accompanied by a corresponding forecast prepared on a historical cost basis.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO 10 Asset Valuations

      • TKO 10.1 Valuations in connection with a bid

        • TKO 10.1.1

          When a PersonG provides a valuation of assets in connection with a BidG , the PersonG must ensure that the valuation is supported by the opinion of an appropriate external and independent valuer.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 10.1.1 Guidance

            1. TKO Rule 10.1.1 applies not only to land, buildings and process plant and machinery but also to other assets, for example, inventory, ships, aircraft and individual parts of a business.
            2. This RuleG does not apply to an assessment of value carried out merely for the purpose of preparation of financial accounts.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 10.1.2

          The person must ensure that such a valuation states:

          (a) the effective date as at which the assets were valued;
          (b) the name, professional qualifications and address of the valuer; and
          (c) if the valuation is not current, that a current valuation would not be materially different.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 10.1.3

          If a statement according with TKO Rule 10.1.2 cannot be made, the PersonG must ensure that the valuation is updated.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 10.1.3 Guidance

            1. In certain cases, Bid DocumentsG and Target CircularsG issued by the BidderG or the TargetG will include statements of assets reproducing Directors'G estimates of asset values published with the entity's accounts. The DFSAG will not regard such estimates as "given in connection with a BidG " except where asset values are a particularly significant factor in assessing the BidG and the estimates are, accordingly, given considerably more prominence in the relevant documents than merely being referred to in a note or appendix to a statement of assets.
            2. In exceptional cases, certain Reporting EntitiesG , in particular property companies, which are the subject of an unexpected BidG may find difficulty in obtaining, within the time available, the opinion of an appropriate external valuer to support an asset valuation, as required by this Section, before the Target CircularG has to be sent out. In such cases, the DFSAG may waive strict compliance with this requirement. The DFSAG will only do this where the interests of shareholders appear on balance to be best served by permitting informal valuations to appear coupled with such substantiation as is available. TargetsG or their advisers who wish to make use of this procedure should consult the DFSAG at the earliest opportunity.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 10.2 Opinion and consent letters

        • TKO 10.2.1

          Where a valuation of assets is given in any document addressed to shareholders:

          (a) the document must include:
          (i) the opinion of the valuer; and
          (ii) a statement that the valuer has given and not withdrawn his consent to the publication of his valuation certificate;
          and
          (b) the valuation certificate must be made available for inspection in the manner described in TKO Rule 8.4.1, together with an associated report or schedule containing details of the aggregate valuation.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 10.2.1 Guidance

            Where the DFSAG is satisfied that disclosure under TKO Rule 10.2.1(b) may be commercially disadvantageous to the entity concerned, it may modify these requirements so as to allow the report or schedule to appear in a summarised form. In certain cases, the DFSAG may require any of these documents to be reproduced in full in a document sent to shareholders.


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO 11 Bid Timing and Revision

      • TKO 11.1 Filing and posting the bid document and target circular

        • TKO 11.1.1

          A BidderG must:

          (a) post the Bid DocumentG to shareholders within 21 days of its announcement of a firm intention to make a BidG ; and
          (b) give prior notice to the DFSAG by filing a copy of the Bid DocumentG with the DFSAG at least 1 day prior to such posting.
          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
          [Amended] DFSA RM42/2007 (Made 15th February 2007). [VER2/02-07]

          • TKO 11.1.1 Guidance

            1. The DFSAG must be consulted if it is considered inappropriate or unlikely that the Bid DocumentG is posted within this period and may, in considering any appropriate waiver or modification, require that interest for the period of delay be included in the BidG .
            2. The DFSAG will not consider the merits of the BidG . It should not be assumed that because of this prior notification, the DFSAG will not use powers available to it where the need for remedial action is subsequently identified.
            3. The DFSAG expects that the Bid DocumentG will be posted within 21 days of the announcement of a firm intention to make a BidG unless the bid is subject to regulatory pre-conditions of a type acceptable to the DFSAG . Such regulatory pre-conditions, if acceptable to the DFSAG may be permitted by way of a modification to delay the posting and disclosure of the bid documents as required under TKO Rule 11.1.1(a) and (b) and TKO Rule 2.4.6. Any such acceptance must be obtained in the form of a modification pursuant to TKO Rule 16.1.
            4. See also TKO Rule 8.1.2 in relation to disclosure of the Bid DocumentG .
            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
            [Amended] DFSA RM40/2007 (Made 8th February 2007). [VER2/02-07]

        • TKO 11.1.2

          The Governing BodyG of the TargetG must:

          (a) advise the Target'sG shareholders of its views on the BidG by posting a Target CircularG to the shareholders within 21 days of publication of the Bid DocumentG ; and
          (b) give prior notice to the DFSAG by filing a copy of the Target CircularG with the DFSAG at least 1 day prior to such posting.
          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
          [Amended] DFSA RM42/2007 (Made 15th February 2007). [VER2/02-07]

          • TKO 11.1.2 Guidance

            1. See also TKO Rule 8.1.2 and TKO Rule 8.2.2 in relation to the disclosure of the Target CircularG .
            2. The DFSAG will not consider the merits of the response to the BidG . It should not be assumed that because of this prior notification, the DFSAG will not use powers available to it where the need for remedial action is subsequently identified.
            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
            [Amended] DFSA RM40/2007 (Made 8th February 2007). [VER2/02-07]

      • TKO 11.2 Closing dates and extensions

        • TKO 11.2.1

          A BidderG must ensure that its BidG remains open for at least 35 days following the date on which the Bid DocumentG is posted.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 11.2.2

          Where a BidderG announces an extension of a BidG , either the next closing date must be stated or, if the BidG is unconditional as to acceptances, a statement may be made that the BidG will remain open until further notice. In the latter case, at least 14 days' notice in writing must be given, before the BidG is closed, to those shareholders who have not accepted.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 11.2.2 Guidance

            There is no obligation to extend a BidG , the conditions of which are not met by the first or any subsequent closing date.


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 11.2.3

          After a BidG has become or is declared unconditional as to acceptances, the BidderG must ensure that its BidG remains open for acceptance for not less than 14 days after the date on which it would otherwise have expired. When, however, a BidG is unconditional as to acceptances from the outset, a 14 day extension is not required but the BidderG must clearly and prominently set out the position in the Bid DocumentG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 11.2.4

          A BidderG must comply with any firm statement made by it as to the duration of its BidG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 11.2.4 Guidance

            If statements in relation to the duration of a BidG such as "the BidG will not be extended beyond a specified date unless it is unconditional as to acceptances" ("no extension statements") are included in documents sent to shareholders in the TargetG , or are made by or on behalf of a BidderG , its DirectorsG , officials or advisers, and not withdrawn immediately if incorrect, then only in exceptional circumstances will the DFSAG allow a BidderG subsequently to extend its BidG beyond the stated date except where the right to do so has been specifically reserved.


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 11.2.5

          A BidderG must not allow or declare its BidG (whether revised or not) to become unconditional as to acceptances after midnight (Dubai time) on the 67th day after the day the initial Bid DocumentG was posted.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 11.2.5 Guidance

            The DFSAG may waive or modify the application of these RulesG if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of these RulesG . Note that a waiver of TKO Rule 11.2.5 will normally only be granted:

            a. if a competing BidG has been announced (in which case both BiddersG will normally be bound by the time-table established by the posting of the competing Bid DocumentG ); or
            b. if the Governing BodyG of the TargetG consents to an extension.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 11.2.6

          On the 67th day after the day upon which the initial Bid DocumentG was posted (or any other date beyond which the BidderG has stated that its BidG will not be extended) the BidderG must make an announcement by 5.00pm (Dubai time) as to whether the BidG is unconditional as to acceptances or has lapsed.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 11.2.7

          All conditions must be fulfilled or the BidG will lapse within 21 days of:

          (a) the first closing date; or
          (b) the date on which the BidG becomes unconditional as to acceptances;

          whichever is the later.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 11.2.8

          If the Governing BodyG of the TargetG proposes to announce any material new information after the 46th day following the posting of the Bid DocumentG , it must consult the DFSAG in advance of making any such announcement.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 11.2.8 Guidance

            1. The DFSAG should be consulted in good time. This RuleG does not displace the obligation upon a reporting entity to make timely disclosure of material information.
            2. Where a matter which might give rise to such an announcement being made after the 46th day is known to the TargetG , every effort should be made to bring forward the date of the announcement.
            3. If an announcement of the kind referred to in this RuleG is made after the 46th day, the DFSAG will normally be prepared to grant an extension (by waiver or modification as necessary) to "Day 53" (see TKO rule 11.4.1) and/or "Day 67" (see TKO rule 11.2.5).
            4. For the purpose of TKO rule 11.2.8, material new information would include trading results, profit or dividend forecasts, asset valuations and proposals for dividend payments or for any material acquisition or disposal.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 11.3 Settlement of consideration

        • TKO 11.3.1

          The consideration must be paid within 14 days of the date of the BidG becoming or being declared unconditional and acceptance thereof, whichever is the later.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 11.4 Revision of bids

        • TKO 11.4.1

          A BidderG must ensure that its BidG , if revised, is kept open for at least 14 days following the date on which the revised Bid DocumentG is posted.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 11.4.1 Guidance

            1. No document revising the BidG may therefore be posted within the 14 days ending on the last day the BidG may become unconditional as to acceptances.
            2. TKO Rule 11.2.4 also applies in relation to revised bids. If statements in relation to the value or type of consideration such as "the BidG will not be further increased" or "our BidG remains at x cents per ShareG and it will not be raised" ("no increase statements") are included in documents sent to TargetG shareholders, or are made by or on behalf of a BidderG , its DirectorsG , officials or advisers, and not withdrawn immediately if incorrect, then only in exceptional circumstances will the DFSAG permit the BidderG to subsequently amend the terms of its BidG in any way, even if the amendment would not result in an increase of the value of the BidG , except where the right to do so has been specifically reserved.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 11.4.2

          Where a BidG is revised, all shareholders who accepted the original BidG must be entitled to the revised consideration.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 11.4.3

          The BidderG may introduce new conditions only to the extent necessary to implement an increased or improved BidG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 11.5 Alternative bids

        • TKO 11.5.1

          The provisions of the RulesG in TKO Section 11.2, TKO Section 11.3 and TKO Section 11.4 apply equally to alternative BidsG , including cash alternatives.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 11.5.2

          Where a firm statement has been made that an alternative BidG will not be extended or reintroduced and that that alternative BidG has ceased to be open for acceptance, neither that alternative, nor any substantially similar alternative, may be reintroduced. Where, however, such a statement has not been made and an alternative BidG has closed for acceptance, a BidderG is not precluded from reintroducing that alternative at a later date.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 11.5.2 Guidance

            Reintroduction would constitute a revision of the BidG and would, therefore, be subject to the requirements of, and only be permitted as provided in, the RulesG in TKO Section 11.4.


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 11.6 Withdrawal of acceptances

        • TKO 11.6.1

          A shareholder of the TargetG who has accepted the BidG may withdraw his acceptance:

          (a) from the date which is 14 days after the first closing date of the initial BidG , if the BidG has not by such date become or been declared unconditional as to acceptances; and
          (b) no later than the time that the BidG becomes or is declared unconditional as to acceptances.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO 12 Restrictions Following Bids

      • TKO 12.1 Delay of twelve months

        • TKO 12.1.1

          Where a BidG has been announced or posted but has not become or been declared unconditional and has been withdrawn or has lapsed, neither the BidderG , nor any PersonG who acted in concert with the BidderG in the course of the original BidG , nor any PersonG who is subsequently acting in concert with any of them, may within 12 months from the date on which such BidG is withdrawn or lapses either:

          (a) make a BidG for the relevant SharesG of the TargetG (including a partial BidG which could result in the BidderG holding SharesG carrying 30% or more of the voting rights of the TargetG ); or
          (b) acquire any SharesG of the TargetG if the BidderG or any such PersonG would thereby become obliged under TKO Chapter 4 to make a BidG ;
          (c) acquire any SharesG of the TargetG or any rights over such SharesG if the SharesG and rights over SharesG held by any such PersonG , together with PersonsG acting in concert with him, would in aggregate carry 30% or more of the voting rights of the TargetG .

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 12.1.2

          The restrictions in TKO Rule 12.1.1 also apply following a partial BidG which could result in a holding of not less than the 30% and not more than 50% of the voting rights of the TargetG whether or not the BidG has become or been declared unconditional. When such a BidG has become or been declared unconditional, the period of 12 months runs from that date.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO 13 Partial Bids

      • TKO 13.1 Application of this chapter

      • TKO 13.2 DFSA consent required

        • TKO 13.2.1

          A potential BidderG must obtain the DFSA'sG prior consent for any partial BidG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 13.2.1 Guidance

            1. Consent will normally be granted under TKO Rule 13.2.1 where a BidG could not result in the BidderG holding SharesG carrying 30% or more of the voting rights of a TargetG .
            2. In the case of a BidG which could result in the BidderG holding SharesG carrying 30% or more but less than 100% of the voting rights of a TargetG , such consent will not normally be granted if the BidderG or PersonsG acting in concert with it have acquired, selectively or in significant numbers, SharesG in the TargetG during the 12 months preceding the application for consent or if SharesG have been purchased at any time after the partial BidG was reasonably in contemplation.
            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 13.3 Restrictions and requirements

        • TKO 13.3.1

          The BidderG and PersonsG acting in concert with it must not purchase SharesG in the TargetG during the Bid PeriodG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 13.3.2

          In the case of a successful partial BidG , neither the BidderG , nor any PersonG who acted in concert with the BidderG in the course of the partial BidG , nor any PersonG who is subsequently acting in concert with any of them, may purchase such SharesG during a period of 12 months after the end of the Bid PeriodG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 13.3.3

          When a BidG is made which may result in the BidderG holding SharesG carrying not less than 30% and not more than 50% of the voting rights of a TargetG , the BidderG must:

          (a) state the precise number of SharesG sought to be acquired; and
          (b) ensure that the BidG is not declared unconditional as to acceptances unless acceptances are received for not less than that number.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 13.3.4

          A BidderG must ensure that any BidG which could result in the BidderG holding SharesG carrying 30% or more of the voting rights of a TargetG is conditional on:

          (a) a specified number of acceptances being received, and
          (b) approval of the BidG being given by shareholders holding over 50% of the voting rights not held by the BidderG and PersonsG acting in concert with it.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 13.3.4 Guidance

            1. Approval is normally signified by means of a separate box on the form of acceptance.
            2. The requirement under TKO Rule 13.3.4 may on occasion be waived if over 50% of the voting rights of the TargetG are held by one shareholder.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 13.3.5

          In making a partial BidG , the BidderG must:

          (a) make the BidG to all shareholders of a class;
          (b) make arrangements for those shareholders who wish to do so to accept in full for the relevant percentage of their holdings;
          (c) ensure that SharesG tendered in excess of this percentage are accepted by the BidderG from each shareholder in the same proportion to the number tendered to the extent necessary to enable it to obtain the total number of SharesG which it has sought to acquire.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 13.3.6

          When a BidG is made for a TargetG with more than one class of equity ShareG capital which may result in the BidderG holding SharesG carrying 30% or more of the voting rights, BidsG for each class must be fair and appropriate.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 13.3.6 Guidance

            The DFSAG should be consulted in advance of any such case.


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO 14 Redemption or Acquisition of Own Capital

      • TKO 14.1 Redemption or acquisition of own shares

        • TKO 14.1.1

          When a Reporting EntityG redeems or acquires its own voting SharesG , any resulting increase in the percentage of voting rights held by a shareholder or group of shareholders acting in concert must be treated as an acquisition for the purpose of the RulesG in TKO Chapter 4.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 14.1.1 Guidance

            1. The DFSAG should be consulted in advance in any case where this RuleG may become relevant. In appropriate circumstances the DFSAG may waive any resulting obligation to make a general BidG if there is a vote of independent shareholders and appropriate procedures are followed. See TKO Chapter 16.
            2. In the case of a redemption or reduction of capital which has as its purpose the elimination of a minority shareholding, the DFSAG may in appropriate circumstances require that at the relevant meetings the majority votes must be excluded.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 14.1.2

          Where an obligation to extend a BidG arises as a consequence of application of TKO Rule 14.1.1, then, for the purposes of these RulesG :

          (a) the Reporting EntityG undertaking the redemption or acquisition is deemed to be the TargetG ;
          (b) where the obligation to extend the BidG arises as a consequence of a shareholder obtaining or consolidating control as a result of the redemption or purchase by the Reporting EntityG of its own shares, that shareholder must extend a BidG ;
          (c) where the obligation to extend the BidG arises as a consequence of a group of PersonsG acting in concert obtaining or consolidating control as a result of the redemption or purchase by the Reporting EntityG of its own shares, each such PersonG must extend a BidG ; and
          (d) the provisions of these RulesG relating to disclosure and, where possible, timing and periods of notice will apply with any necessary adaptation to meet that purpose.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 14.1.2 Guidance

            Where an obligation to make a BidG arises as a consequence of PersonsG acting in concert, the DFSAG should be consulted at the earliest opportunity to determine whether any waiver or modification of this RuleG is appropriate. See also TKO Rule 4.1.1 and accompanying GuidanceG .


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 14.1.3

          Any redemption or acquisition of SecuritiesG of the BidderG or SharesG of the TargetG made or to be made in terms of a BidG or any such redemption or acquisition effected within 12 months prior to the commencement of the Bid PeriodG must be disclosed in accordance with TKO Section 3.4 and in all relevant Bid DocumentsG and Target CircularsG .


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 14.1.3 Guidance

            Nothing in this RuleG limits or displaces any obligation of disclosure that a BidderG or TargetG or other PersonG may have aside from these RulesG and irrespective of the existence of, or obligation to extend, a BidG .


            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 14.2 Other methods of bid

        • TKO 14.2.1

          Where a BidG is implemented by a scheme of arrangement or conversion of SecuritiesG or any other method, then, for the purposes of these RulesG :

          (a) the DFSAG must be consulted in advance;
          (b) in the case of a scheme of arrangement, the Reporting EntityG in respect of which the scheme is proposed is deemed to be the TargetG , and the PersonsG who will be the holders of SharesG of the Reporting EntityG after the scheme of arrangement has been sanctioned are deemed to be the BidderG ; and
          (c) the provisions of these RulesG relating to disclosure and, where possible, timing and periods of notice will apply with any necessary adaptation to meet that purpose.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO 15 [Deleted]

      [Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]

      • TKO 15.1 [Deleted]

        [Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]

        • TKO 15.1.1 [Deleted]

          [Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]

          • [Deleted]

            [Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]

        • TKO 15.1.2 [Deleted]

          [Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]

          • [Deleted]

            [Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]

        • TKO 15.1.3 [Deleted]

          [Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]

        • TKO 15.1.4 [Deleted]

          [Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]

        • TKO 15.1.5 [Deleted]

          [Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]

      • TKO 15.2 [Deleted]

        [Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]

        • TKO 15.2.1 [Deleted]

          [Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]

        • TKO 15.2.2 [Deleted]

          [Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]

        • TKO 15.2.3 [Deleted]

          [Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]

        • TKO 15.2.4 [Deleted]

          [Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]

          • [Deleted]

            [Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]

    • TKO 16 Waivers or Modifications

      • TKO 16.1 Applications to waive or modify the Markets Law 2012 and rules

        • TKO 16.1.1

          A PersonG wishing to seek a waiver or modification of a provision of the Law or RulesG as it applies to him, must:

          (a) apply in writing to the DFSAG ;
          (b) clearly identify the provision in relation to which he seeks a waiver or modification;
          (c) ensure that the application is accompanied by a statement of the reasons supporting the application; and
          (d) pay the prescribed fee (if any).

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 16.1.2

          In considering the application, the DFSAG may:

          (a) carry out any enquiries which it considers appropriate;
          (b) require the applicant to provide additional information in such form as the DFSAG considers appropriate;
          (c) require any information furnished by the applicant to be verified in such manner as the DFSAG may specify; and
          (d) take into account any information which it considers appropriate in relation to the application.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO 16.1.2 Guidance

            1. Under Article 9 of the Markets Law 2012 the DFSAG may waive or modify the application of the Markets Law 2012 or of the RulesG .
            2. The DFSAG may grant a waiver or modification from the application of the RulesG where a TakeoverG transaction is subject to the dual jurisdiction of the DFSAG and a regulator or agency of a jurisdiction other than the DIFCG . While applications will be considered on a case by case basis, it should be expected that the factors that the DFSAG will take into account in considering such an application will include:
            (a) whether the application of legislation or procedures of that other jurisdiction will or will not adequately and properly govern the transaction;
            (b) whether such legislation or procedures will or will not provide shareholder protection in a manner commensurate with these RulesG , DIFCG Law and international best practice;
            (c) whether the grant of the application is or is not in the interests of the DIFCG .

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
            [Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]

    • TKO 17 Enforcement

      • TKO 17.1 Applicable provisions

        • TKO 17.1 Guidance

          1. The Takeover Rules (including the Takeover PrinciplesG in TKO Section 1.5) have the force of law. A failure to comply with a rule may constitute a contravention by virtue of Article 85 of the Regulatory LawG 2004. Those that seek to take advantage of the facilities of the SecuritiesG markets in the DIFCG should conduct themselves in matters relating to TakeoverG s not only in accordance with the Takeover Rules but also in accordance with the highest business standards.
          2. Part 6 of the Markets Law 2012 addresses prevention of market misconduct, and Part 7 addresses contraventions and proceedings. Article 68 of the Markets Law 2012 provides that the DFSAG may apply to the CourtG to obtain an order or orders against a PersonG who has contravened the Markets Law 2012 or the RulesG . These include, by Article 68(1)(e), orders in relation to activities relating to TakeoverG s. Under Article 70(2), the FMTG also has jurisdiction to make a finding or declaration of unacceptable circumstances and additional orders as it sees fit.
          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
          [Amended] DFSA RM87/2012 (Made 14th June 2012). [VER5/06-12]
          [Amended] DFSA RM142/2014 (Made 21st August 2014). [VER6/06-14]

    • TKO App1 Contents of Bid Documents

      • TKO A1.1 Disclosure as to the bidder and its intentions

        • TKO A1.1.1

          The BidderG must disclose the following information:

          (a) the name and address of the BidderG ;
          (b) the name and address of any financial adviser or other person making the BidG on behalf of the BidderG ;
          (c) the identity of any PersonsG acting in concert with the BidderG ;
          (d) whether or not any SecuritiesG acquired in pursuance of the BidG will be transferred to any other PersonsG and, if so, the names of any such PersonsG and details of any such agreement, arrangement or understanding;
          (e) the names of the DirectorsG of the BidderG and their direct and indirect interests, if any, in the BidderG and TargetG ;
          (f) the nature and particulars of the business of the BidderG and its financial and trading prospects;
          (g) the Bidder'sG reasons for the BidG ;
          (h) the Bidder'sG intentions regarding the continuation of the business of the TargetG ;
          (i) the Bidder'sG intentions regarding any major changes to be introduced in the business of the TargetG , including any redeployment of the fixed assets of the TargetG ;
          (j) the Bidder'sG intentions with regard to the continued appointment of DirectorsG and employment of the employees of the TargetG and of its subsidiaries.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO A1.2 Financial Disclosure in Securities Exchange Bid

        • TKO A1.2.1

          In the case of a Securities Exchange BidG , the BidderG must disclose the following information relating to the financial affairs of the BidderG :

          (a) for the past 3 financial years for which the information has been published, turnover, net profit or loss before and after taxation, the amount of tax, extraordinary items, minority shareholders' interests, the amount absorbed by dividends and earnings and dividends per ShareG ;
          (b) a statement of the assets and liabilities shown in the latest published audited accounts;
          (c) a cash flow statement if provided in the latest published audited accounts;
          (d) all known material changes in the financial or trading position of the BidderG subsequent to the latest published audited accounts or a statement that there are no known material changes;
          (e) details relating to items referred to in paragraph (a) above in respect of any interim statement or preliminary announcement made since the latest published audited accounts;
          (f) inflation-adjusted information relating to paragraphs (a) and (b) if any has been published;
          (g) significant accounting policies together with any points from the notes to the accounts which are of major relevance to an appreciation of the figures, including those relating to inflation adjusted information;
          (h) a description of how the BidG is to be financed and the source of the finance, including details of the principal lenders or arrangers of such finance;
          (i) details of any reorganisation of capital including capital raisings during the two financial years preceding the commencement of the Bid PeriodG ; and
          (j) details of any bank overdrafts or loans, or other similar indebtedness, mortgages, charges or guarantees or other material contingent liabilities of the BidderG and any of its subsidiaries, or, if there are no such liabilities, a statement to such effect.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO A1.2.2

          The figures to be disclosed under TKO A1.2.1 (a) and (b) must be adjusted to eliminate material unusual and non-recurring items and the nature of the adjustments made must be disclosed.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO A1.2.3

          Where, because of a change in accounting policy, figures are not comparable to a material extent, this must be disclosed and where possible the approximate amount of the resultant variation must be stated.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO A1.3 Disclosure of shareholdings and dealings

        • TKO A1.3.1

          The BidderG must disclose:

          (a) the shareholdings of the BidderG in the TargetG ;
          (b) the holdings of SecuritiesG in the BidderG (in the case of a Securities Exchange BidG only) and in the TargetG in which each DirectorG of the BidderG is directly or indirectly interested;
          (c) the holdings of SecuritiesG in the BidderG (in the case of a Securities Exchange BidG only) and in the TargetG which any PersonG acting in concert with the BidderG owns or controls, together with the name of such PersonG acting in concert;
          (d) the holdings of SecuritiesG in the BidderG (in the case of a Securities Exchange BidG only) and in the TargetG owned or controlled by any PersonG who, prior to the posting of the Bid DocumentG , has irrevocably committed himself to accept the BidG , together with the name of such PersonG .

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO A1.3.2

          If in any of the above categories there are no holdings of SharesG or SecuritiesG , this fact must be stated, provided that this does not apply to the category in TKO A1.3.1(d) if there are no such irrevocable commitments.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO A1.3.3

          If any PersonG whose holdings of SharesG or SecuritiesG are required by this Section to be disclosed has dealt for value in the SharesG in question during the period beginning six months prior to the Bid PeriodG and ending with the latest practicable date prior to the posting of the Bid DocumentG , the details, including dates and prices, must be stated. If no such dealings have taken place, this fact must be stated.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO A1.4 Other disclosures

        • TKO A1.4.1

          The BidderG must disclose the following information:

          (a) the price or other consideration to be paid for the SharesG ;
          (b) precise particulars of the SharesG in respect of which the BidG is made and whether they are to be acquired cum or ex any dividend or other distribution which has been or may be declared;
          (c) the terms of the BidG and its proposed implementation and the mechanics thereof;
          (d) all conditions applicable to the BidG ;
          (e) a statement to the effect that settlement of the consideration to which any shareholder is entitled under the BidG will be implemented in full in accordance with the terms of the BidG without regard to any lien, right of set-off, counterclaim or other analogous right to which the BidderG may otherwise be, or claim to be, entitled against such shareholder;
          (f) particulars of all documents required, and procedures to be followed, for acceptance of the BidG ;
          (g) whether the BidderG intends to avail itself of any powers of compulsory acquisition;
          (h) in the case of a partial BidG , the reasons for making a partial BidG rather than a full BidG ;
          (i) where the BidG is for cash or includes an element of cash or other assets not comprising SecuritiesG , the Bid DocumentG must include confirmation by a financial adviser or by an appropriate external and independent PersonG (for example, the Bidder'sG bank) that resources are available to the BidderG sufficient to satisfy full acceptance of the BidG ;
          (j) a statement on whether or not any agreement, arrangement or understanding (including any compensation arrangement) exists between the BidderG or any PersonG acting in concert with it and any of the DirectorsG of the TargetG or PersonsG who were DirectorsG within the preceding 12 months, or shareholders or PersonsG who were shareholders within the preceding 12 months, having any connection with or dependence upon the BidG ;
          (k) a statement on whether or not any agreement, arrangement or understanding exists between a BidderG and the TargetG and PersonsG acting in concert with them in relation to the SharesG ;
          (l) full particulars of any such agreement, arrangement or understanding referred to in (j) and (k); and
          (m) where the BidG involves the issue of unlisted SecuritiesG , an estimate of the value of such SecuritiesG provided by an external independent adviser, together with the assumptions and methodology used in arriving at that value.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

          • TKO A1.4.1 Guidance

            1. For the purposes of TKO A1.4.1(i), the PersonG confirming that resources will be available will not be expected to produce the cash itself if, in giving the confirmation, it acts responsibly and has taken all reasonable steps to assure itself that the cash will be available.
            2. The DFSAG may waive or modify the application of certain provisions of this TKO A1.4 if it is satisfied that circumstances are appropriate. See Chapter 16 of these RulesG . In relation to TKO A1.4.1(e), note that the DFSAG will only grant a waiver or modification in exceptional circumstances and where all shareholders are to be treated equally.

            Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO A1.4.2

          In the case of a Securities Exchange BidG , the BidderG must provide the following additional information:

          (a) a summary of the principal contents of each material contract (not being a contract entered into in the ordinary course of business) entered into by the BidderG or any of its subsidiaries during the period beginning two years before the commencement of the Bid PeriodG , including particulars of dates, parties, terms and conditions and any consideration passing to or from the BidderG or any of its subsidiaries;
          (b) whether and in what manner the emoluments of the DirectorsG of the BidderG will be affected by the acquisition of the TargetG or by any other associated transaction, or, if there will be no affect, a statement to that effect;
          (c) details of the authorised and issued ShareG capital and the rights of shareholders in respect of capital, dividends and voting;
          (d) details of any material litigation to which the BidderG is, or may become, a party; and
          (e) how and when the documents of title to the SecuritiesG will be issued.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO App2 Contents of Target Circulars

      • TKO A2.1 Disclosure in initial target circular

        • TKO A2.1.1

          The Governing BodyG of the TargetG must disclose the following information:

          (a) the substance of the advice given to it by its external advisers;
          (b) where relevant, its views on the statements in the Bid DocumentG regarding the Bidder'sG intentions in respect of the TargetG and its DirectorsG made pursuant to TKO A1.1;
          (c) details of the holdings of SecuritiesG of the TargetG in the BidderG ;
          (d) details of the holdings of SharesG in the TargetG and SecuritiesG in the BidderG in which DirectorsG of the TargetG are directly or indirectly interested;
          (e) details of the holdings of SharesG in the TargetG and (in the case of a Securities Exchange BidG only) of SecuritiesG in the BidderG which any PersonG acting in concert with the TargetG owns or controls and the holdings of SharesG in the TargetG and, (in the case of a Securities Exchange BidG only) of SecuritiesG in the BidderG , owned or controlled by a subsidiary of the TargetG , or by any PersonG acting in concert with it;
          (f) details of the holdings of SharesG in the TargetG and (in the case of a Securities Exchange BidG only) of SecuritiesG in the BidderG owned or controlled by a PersonG who has any agreements, arrangements or understandings of the kind referred to in TKO A1.4.1 (j) and (k) with the TargetG or with any PersonG acting in concert with the TargetG ;
          (g) details of any agreements, arrangements or understandings of the kind referred to in TKO A1.4.1 (j) and (k) or, if there are none, a statement to that effect;
          (h) material particulars of all service contracts of any DirectorG or proposed DirectorG of the TargetG with the entity or any of its subsidiaries, or, if there are none, a statement to that effect; and
          (i) whether the DirectorsG of the TargetG intend, in respect of their own beneficial holdings of SharesG , to accept or reject the BidG .

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO A2.1.2

          If any PersonG whose holdings of SharesG or SecuritiesG are required by TKO A2.1.1 to be disclosed has dealt for value in the SharesG or SecuritiesG in question during the period beginning six months prior to the Bid PeriodG and ending with the latest practicable date prior to the posting of the Target CircularG , the details, including dates and prices, must be stated. If no such dealings have taken place, that fact must be stated.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO A2.2 Financial disclosure

        • TKO A2.2.1

          The TargetG must disclose the following information relating to its financial affairs:

          (a) for the past 3 financial years for which the information has been published, turnover, net profit or loss before and after taxation, the amount of tax, extraordinary items, minority shareholders' interests, the amount absorbed by dividends and earnings and dividends per ShareG ;
          (b) a statement of the assets and liabilities shown in the latest published audited accounts;
          (c) a cash flow statement if provided in the latest published audited accounts;
          (d) all known material changes in the financial or trading position of the TargetG subsequent to the latest published audited accounts or a statement that there are no known material changes;
          (e) details relating to items referred to in paragraph (a) above in respect of any interim statement or preliminary announcement made since the latest published audited accounts;
          (f) inflation-adjusted information relating to paragraphs (a) and (b) if any has been published;
          (g) significant accounting policies together with any points from the notes to the accounts which are of major relevance to an appreciation of the figures, including those relating to inflation adjusted information;
          (h) details of any reorganisation of capital including capital raisings during the two financial years preceding the commencement of the Bid PeriodG ; and
          (i) details of any bank overdrafts or loans, or other similar indebtedness, mortgages, charges or guarantees or other material contingent liabilities of the TargetG and any of its subsidiaries, or, if there are no such liabilities, a statement to such effect.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO App3 Contents of Subsequent Documents

      • TKO A3.1 Obligation to update material information

        • TKO A3.1.1

          Documents subsequently sent to shareholders of the TargetG by either the BidderG or TargetG must contain details of any material changes in information previously published by or on behalf of the relevant BidderG or TargetG during the Bid PeriodG . If there have been no such changes, this must be stated.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO A3.1.2

          Without limiting the application of TKO A3.1.1, the following matters must be updated:

          (a) holdings of relevant SharesG and SecuritiesG and dealings (TKO A1.3.1 and TKO A2.1.1(c)–(f));
          (b) Directors'G emoluments (TKO A1.4.2(b));
          (c) special arrangements (TKO A1.4.1(j));
          (d) ultimate owner of SharesG acquired under the BidG (TKO A1.1.1(d));
          (e) changes to Directors'G service contracts (TKO A2.1.1(h)); and
          (f) agreements, arrangements or understandings in relation to BidsG (Rules TKO A1.4.1(j) and (k) and TKO A2.1.1(f) and (g)).

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO App4 [Deleted]

      [Deleted] DFSA RM52/2007 (Made 1st December 2007). [VER3/12-07]