Introduction

The Securities and Futures Commission (“SFC”) has published the latest Takeovers Bulletin (the “Bulletin”) (Issue No. 73) in June 2025, offering important guidance on regulatory requirements and recent developments in takeovers and mergers. This newsletter summarises the key updates and the implications for practitioners and investors engaged in corporate transactions in Hong Kong. As for the updates on Rule 11.1(f) of The Codes on Takeovers and Mergers and Share Buy-Backs Takeovers Code (the “Takeovers Code”), please see our article here.

Reminder to liquidators on disclosure obligations

The SFC has reiterated the importance of compliance with Rule 3.7 of the Takeovers Code, which mandates monthly updates on the progress of talks or contemplated offers once an announcement has been made. This obligation extends to offeree companies undergoing winding-up proceedings.

When a winding-up petition is filed after a Rule 3.7 announcement, the offeree company or its liquidator must continue disclosing material developments, such as the granting of a formal winding-up order or the status of negotiations with potential offerors. Liquidators assume the responsibilities of directors upon appointment and must ensure timely announcements are made via The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) or the SFC website. Furthermore, liquidators are advised to submit draft announcements to the SFC for review before publication. The SFC also emphasises the importance of accurate record-keeping for offer period timelines, which rely on input from both offeree companies and offerors. For complex scenarios, liquidators should seek guidance from legal and financial advisors and consult the SFC at the earliest opportunity.

Timelines for competing offers

The SFC has highlighted the need for orderly frameworks in competitive takeover situations, where shareholders must weigh multiple offers. Under Rule 3.9, the SFC may impose deadlines on potential competing offerors to clarify their intentions, such as by announcing a firm offer or withdrawing.

Key factors the SFC considers when setting such deadlines include:

1.      the duration of the offer period;

2.      any delays by the competing offeror;

3.      the proposed timetable for the competing offer;

4.      potential adverse effects on the offeree company; and

5.      the conduct of all parties involved.

The SFC encourages offeree companies to proactively request such deadlines to reduce uncertainty for shareholders. This is particularly relevant when an initial offeror has already published its offer document, and shareholders face pressure to decide before the closing date. In addition, the Bulletin also reminds parties to maintain confidentiality during preliminary discussions to avoid premature “talks” announcements, which could disrupt markets or disadvantage shareholders.

Takeaways

The latest Bulletin brings key updates to Hong Kong’s takeover framework. The SFC clarifies the liquidators’ disclosure duties during wind-ups and introduces clearer timelines for competing offers under Rule 3.9. These changes promote transparency and protect shareholder interests. Practitioners should review Practice Note 7 and consult the SFC early for complex deals. The updates demonstrate the regulator’s commitment to maintaining an orderly and fair takeover market. If in doubt, it is advisable to seek legal advice to ensure compliance with the complex regulatory framework.