Speaker(s)Ms Maria Sit, Partner, Dechert
What will you do if you are a board member or company secretary of a target company that is subject to a takeover bid? Will you stand to one side and watch as the shareholder dispute unfolds? Or, will you take or suggest your board to take a more active role to ensure that the company’s interests are adequately protected?
The case of Aeso Holding Limited is a stern reminder of how wild a hostile takeover in Hong Kong can become. As a Bloomberg article puts it, it was “part thriller, part comedy and a lot of drama”. The saga which took two years of court litigation to resist, was “so brazen it shocked even veteran dealmakers appalled by the unabashed tactics used to try to take over [Aeso].” This is just one of many bitter boardroom shareholder disputes we have seen on the rise in Hong Kong. Immeasurable time and energy is spent by parties to defend resulting litigation, going to great lengths to justify individual and collective company decisions.
Although public companies are unlikely to have experienced what Aeso was subject to, they should nevertheless prepare a takeover response plan. The threat of a takeover remains very real. This is especially so when share prices of many public companies around the world have plunged as a result of the COVID-19 pandemic. In addition, the rising US-China tension and the National Security Law in Hong Kong have led to further trade sanctions and the removal of the special status that Hong Kong once enjoyed. This may potentially lead to business disruptions, increased liquidity risks, and decreases in share prices of affected public companies. This makes it very attractive for buyers or investors who are looking to capitalise on the situation and launch takeover bids.
A seasoned speaker on litigation will address some of the issues that target companies may face during a takeover bid, and will also discuss how a board member or company secretary of a public company may best deal with such bids effectively while fulfilling legal and regulatory obligations.
(Recorded in March 2022)
Ms Maria Sit