Revision of the Singapore Code on Take-Overs and Mergers

Singapore Code on

Take-Overs and

Mergers

14 July 2026

LEGAL

UPDATE

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SUMMARY

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KEY AMENDMENTS

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CONCLUSION

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REFERENCES

In this

Update

The Monetary Authority of

Singapore on the advice of the

Securities Industry Council recently issued a revised

Singapore Code on Take-overs and Mergers (“Code”)

following a public consultation.

The revised Code takes effect from 16 July 2026.

This latest round of revisions to the Code aims to, among others, (a) protect the competitive process of take-over and merger transactions;

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SUMMARY

On 16 June 2026, the Monetary Authority of Singapore, on the advice of the Securities Industry Council (“SIC”), issued a revised Singapore Code on Take-overs and Mergers (“Code”) following a public consultation conducted by the SIC. The revised Code takes effect from 16 July 2026.

This latest round of revisions to the Code aims to, among others, protect the competitive process of take-over and merger transactions, improve certainty and timeliness of schemes of arrangement, and enhance disclosures to investors and shareholders.

In summary, key amendments have been introduced to the Code to regulate or provide guidance on:

(f)

information transparency to offerors; and

KEY AMENDMENTS

1.

Deal protection measures and other offer-related arrangements

The revised Code introduces amendments in relation to deal protection measures and other offer-related arrangements, with a view to striking a balance between mitigating their anti-competitive effect and allowing offeree boards to retain the discretion to grant appropriate deal protection measures and other offer-related arrangements if they are in the best interests of the offeree’s shareholders.

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Under the current Rule 13 of the Code, any break fee payable by the offeree is capped at 1% of its value (as implied by the offer price), and the offeree board and its financial adviser are required to confirm to the SIC in writing that the break fee is in the best interests of the offeree’s shareholders.

The revised Code generally retains the existing Rule 13 but introduces two (2) key amendments:

(i)

where multiple break fee arrangements are entered into, the aggregate value of all such fees must not exceed the 1%

cap; and

The revised Code provides that offeree directors should carefully consider whether the commitments given to an offeror in an implementation agreement would deter other potential competing offerors. In this regard, the revised Code provides the following guidance on certain terms which may be found in implementation agreements in order to manage their anti-competitive effect:

(i)

exclusivity arrangements must include an appropriate

“fiduciary out” provision to ensure the offeree board can engage with or respond to competing offers where required to discharge their fiduciary duties;

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The revised Code goes on to clarify that customary provisions pertaining to the following: (A) representations and warranties in relation to information provided by the offeree to the offeror; (B)

an obligation that requires the offeree to carry out certain procedural actions to progress an offer via a scheme of arrangement; or (C) the non-occurrence of specific events or actions which do not deter competition, may be included in the implementation agreement.

The revised Code also considers that the implementation agreement should include a clause providing that any provision found by the SIC to be impermissible under Rule 13 of the Code shall have no effect and be disregarded. In the event such provision is identified by the SIC after the implementation agreement is executed, the SIC will require remedial action and may initiate disciplinary action.

2.

Schemes of arrangement (New Notes (e) and (f) on definition of

“offer”)

The revised Code also introduces the following amendments in relation to take-overs by way of schemes of arrangement:

The abovementioned pre-sanction requirements will not apply where material official authorisation or regulatory clearance remains outstanding, provided that it is unclear what steps are required to obtain such approvals or that such steps would give rise to circumstances which are of material significance to the offer.

3.

Offeror statements

The revised Code introduces a number of amendments relating to statements made by offerors and potential offerors.

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Currently, the Code provides that where an announcement of a firm intention to make an offer is premature or inappropriate, a holding announcement may be made and monthly updates on the progress of such talks are required until an announcement is made on the decision to make an offer or otherwise.

In practice however, the SIC may impose a ‘put up or shut up’

deadline for the potential offeror to clarify its intentions by either announcing: (i) a firm intention to make an offer; or (ii) that it will not be making an offer (the “Relevant Announcement”).

The revised Code codifies this practice by expressly providing that in such situations, the SIC reserves the right to, following consultation with the potential offeror and the offeree, direct the potential offeror to make the Relevant Announcement by the 28th day from the date of such direction.

The SIC has the right to impose an earlier or later deadline where appropriate.

The revised Code provides that the disclosure of an indicative offer price is normally not permitted prior to a firm offer announcement except in exceptional circumstances. In the event of such disclosure:

(i)

any subsequent offer made by the potential offeror must be made on the same or better terms; and

The SIC again has the right to impose an earlier or later deadline where appropriate.

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Under the revised Code, where the offeror has previously made a no increase statement (i.e. that an offer will not be increased) or a no extension statement (i.e. that an offer will not be extended) in respect of its offer to the offeree, the SIC will not grant consent to such offeror (even on recommendation by the offeree’s board) to make a more favourable offer subsequently until the later of: (i)

three (3) months after the previous offer has been withdrawn or lapsed; or (ii) the end of the offer period of any competing offer.

This restriction ensures that offerors are held to any no increase or no extension statements made, given that the offeree’s shareholders would have made decisions on their holding of shares on the basis of such statements.

4.

Frustrating actions (New Notes 9 and 10 on Rule 5)

The revised Code enhances the framework governing frustrating actions, being actions taken by an offeree board that may impede the ability of the offeree’s shareholders to consider an offer.

In particular, the revised Code clarifies that where the offeree’s shareholders’ approval is sought for a proposed frustrating action, the offeree board must obtain competent independent advice on whether the financial terms of the proposed frustrating action are fair and reasonable and disclose the substance of that advice to the offeree’s shareholders. Further, the offeree board must consult the

SIC regarding the date of the proposed meeting of the offeree’s shareholders and send a circular containing, among others, full details of the proposed frustrating action to the offeree’s shareholders as soon as practicable.

In addition, the revised Code has also introduced amendments to clarify that the SIC would normally waive the requirement for the offeree’s shareholders’ approval where a proposed frustrating action is conditional on the offer being withdrawn or lapsing, provided that the offeree board discloses to the offeree’s shareholders the necessary details of the proposed frustrating action by way of an announcement.

5.

Sale of offeree’s assets (New Note 5 on Rule 21)

The revised Code also introduces additional requirements for an asset sale transaction that is in competition with an offer for voting rights. In particular:

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quantification of the amount per share expected to be paid to the offeree’s shareholders has been made; and (ii) the price paid by the purchaser does not exceed the amount per share expected to be paid to the offeree’s shareholders.

These measures recognise that a competing asset sale may, in effect, present the offeree’s shareholders with an alternative to an offer for voting rights. They ensure that such transactions are subject to comparable disclosure standards, thereby informing the decision-making of the offeree’s shareholders who are likely to compare both transaction options.

6.

Information transparency to offerors

The revised Code also enhances the transparency of information available to offerors.

New Notes 3 and 4 on Rule 9.2)

The revised Code requires that, upon request from any bona fide offeror or potential offeror, any information provided to another offeror or potential offeror at the time of request and in the next seven (7) days must be furnished equally and promptly to the first-mentioned bona fide offeror or potential offeror. This may be implemented through mechanisms such as a common data room with all offerors or potential offerors being given the same level of access.

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The foregoing Rule applies to site visits and management meetings. Accordingly, if an offeror or potential offeror is afforded a site visit or management meeting, an equivalent site visit or meeting must be granted to any bona fide offeror or potential offeror that requests for information under Rule 9.

2.

This is intended to prevent selective disclosure by the offeree board, which could otherwise disadvantage less favoured offerors or potential offerors and deny the offeree’s shareholders the opportunity to consider competing offers.

Under the revised Code, the new Rule 8.8 requires the offeree to provide offerors and potential offerors with an estimate of the aggregate fees and expenses relating to key categories of professional advice (e.g. financial, legal, accounting, and public relations advice) expected to be incurred by the offeree in connection with the offer. The offeree must disclose revised estimates where: (i) the aggregate fees and expenses payable are likely to exceed the estimated maximum disclosed by 10%

or more; or (ii) the final fees and expenses actually paid exceed the estimated maximum disclosed by 10% or more.

Where fee structures are variable or not capped, this should broadly be stated with an indication of the nature of such arrangements.

7.

Use of videos and social media (New Notes 5 and 6 on Rule 9.1)

The revised Code also introduces rules governing the use of videos and social media in the context of an offer. In particular:

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CONCLUSION

Overall, the revisions to the Code aim to strengthen fair competition in take-overs and mergers, clarify processes in relation to schemes of arrangement, and improve information transparency for investors and shareholders.

REFERENCES

Please click here to access the revised Code.

Please click here to access the Consultation Paper on Revision of the

Singapore Code on Take-Overs and Mergers.

Please click here to access the Consultation Conclusions on Revision of the Singapore Code on Take-Overs and Mergers.

The content of this article does not constitute legal advice and should not be relied on as such.

Specific advice should be sought about your specific circumstances. Copyright in this publication is owned by Drew & Napier LLC. This publication may not be reproduced or transmitted in any form or by any means, in whole or in part, without prior written approval.

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If you have any questions or comments on this article, please contact:

Steven Lo, PBM

Managing Director, Corporate & Finance

Head, Mergers & Acquisitions

Co-Head, Capital Markets

T: +65 6531 2798

E: steven.lo@drewnapier.com

Jon Nair

Director, Corporate M&A

T: +65 6531 2404

E: jon.nair@drewnapier.com

Tan Teng Sen

Director, Corporate M&A

T: +65 6531 2234

E: tengsen.tan@drewnapier.com

Jin Wei Tan

Director, Corporate M&A

T: +65 6531 2277

E: jinwei.tan@drewnapier.com

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