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CBB issues new info on takeovers, mergers, acquisitions and share repurchases.

Byline: (Staff Writer)

The Central Bank of Bahrain (CBB) has issued a new directive with respect to establishing a regulatory framework for takeovers, mergers, acquisitions and share repurchase (TMA) transactions. The new Module is incorporated as a part of the Capital Market Rulebook - Volume 6.

The Module, says the CBB, provides an orderly framework within which takeovers, mergers or acquisitions are to be conducted, and sets forth special requirements relating to timing and mode of offer, announcements, documentation and disclosure of adequate information to enable shareholders to make an informed decision as to the merits of an offer, including the option of relinquishing their holdings.

It claims that the new regulatory Module seeks to protect the interests of investors by providing all shareholders with equal treatment and adequate provision of information, preventing conflicts of interest and frustration of a bona fide offer as well as ensuring that an offer made can be fulfilled.

The CBB said that these principles are implemented through the types of offer set out under the Module, including a voluntary offer, the obligation under certain circumstances to make a mandatory offer or compulsory acquisition as well as a partial offer. In all instances, it says, offers are made to all shareholders thereby ensuring minority investor protection and increased level of participation by shareholders in the capital market.

"This Module contains the most detailed takeover code in the region, providing unparalleled investor protection and facilitation of TMA transactions and ensures an efficient and transparent market"; said Abdul Rahman Al-Baker, the CBB's Executive Director of Financial Institutions Supervision.

The CBB claims to be confident that the new regulations of the capital market will further facilitate the development of the capital market and enhance the image of Bahrain as a centre for raising capital.

The TMA Module is the new Module issued by the CBB for Volume 6 (Capital Markets) after the Markets and Exchanges (MAE) Module which was issued in October 2008.

"The CBB is in the process of finalising two other Modules of Volume 6, which are the Clearing, Settlement and Depository (CSD) Module and Cooperation and Exchange of Information with Overseas Authorities (ICO) Module" added Ali Thamer, the Director of Capital Market Directorate.

2009 CPI Financial. All rights reserved.

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Publication:CPI Financial
Date:Feb 8, 2009
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