Public bids for shares of a public company must adhere to the principles set in a Finance Ministry’s draft circular.
Specifically, bid conditions must be equal for all shareholders of a public company having shares to be bid (target company). Bidders must have time for considering share-buying and -selling requests and be supplied with adequate information in order to have access to those requests. The self-determination right of shareholders of the target company must also be respected.
Under the draft, public bid for shares is a form of transaction to be made by organizations or individuals in order to buy and own all or some voting shares of a public company.
Organizations or individuals that hold no shares or hold less than 25% of shares of a public company and wish to buy more shares in order to own 25% or more of outstanding voting shares of that company, and those already holding 25% or more of total voting shares of a public company and wishing to buy more shares in order to hold up to 51%, 65% or 80% of that company, would be obliged to publicly bid for shares.
However, they are not required to make public bids if they buy newly issued shares through public offering of separate shares under a plan approved by the Shareholders’ General Meeting of a public company; when a major shareholder of the public company transfers his/her/its shares to another individual, resulting in the change in holding rate exceeding 25%, or when they gradually buy shares of the public company at a rate of under 5% during three months.
For listed companies, according to the draft, public bids must not be lower than the average closing prices of shares of a target company during 10 trading sessions preceding the date of official bid. For unlisted companies, public bids must not be lower than the average electronically agreed trading prices of a target company during 10 trading days preceding the date of official bid (for organizations having registered transactions), or the average prices of a target company during 10 trading days preceding the date of official bid at two or more securities companies which regularly list prices of shares of that company (for companies having not yet registered transactions).
Licensed issuers of separate shares are defined in a draft decree on public offering of separate shares which has been recently put for public opinion.
They include newly set up joint-stock companies; enterprises, including foreign-invested ones, transformed into joint-stock companies, except equitized state enterprises; and joint-stock companies, including public ones, engaged in separate issuance of shares.
Under the draft, offering of separate shares is public offering of shares directly to professional securities investors; or less than 100 unprofessional securities investors; or unlimited number of current shareholders of issuing organizations provided that the transfer duration is at least one year.
Joint-stock companies set up and operating under foreign laws would not be allowed to offer shares in the Vietnamese territory, unless otherwise provided for by a treaty to which
Prior to and during the offering, an issuing organization may not advertise such offering on the mass media, but would notify it to a competent state agency before the offering.
To offer separate shares, an issuing organization must satisfy the following conditions:
- Having an issuance plan and a plan on the use of proceeds from the offering, approved by the Shareholders’ General Meeting or the Board of Directors or as authorized by the Shareholders’ General Meeting, for joint-stock companies; the Members’ Council or the owner of a company (for limited liability companies transformed into joint-stock ones); the owner of an enterprise with 100% foreign capital or the Board of Directors of a joint venture, for foreign-invested enterprises transformed into joint-stock companies; or founding shareholders (for new enterprises set up as joint-stock companies);
- Having a valid dossier of offering registration which must be submitted to a competent state agency at least 15 days before the offering, unless otherwise provided for by a specialized law.-