Bapepam plans new regulation to limit takeovers

The Jakarta Post ,  Jakarta   |  Fri, 06/20/2008 10:34 AM  |  Business

The Capital Market Supervisory Agency (Bapepam) will issue a new regulation aimed at keeping well-performing stocks on the stock market and protecting minority shareholders, sources at the agency said Thursday.

Among the regulations is a proposed rise in the minimum number of shares required by a shareholder to allow them to bid for shares held by other shareholders.

A source in the agency said the regulation would require a shareholder to have between 30 and 35 percent shares to enable them launch the bid or tender offer.

The current regulation only requires a minimum of 25 percent ownership to initiate a tender offer, making it easier for shareholders to gain full control of a publicly listed company and make it privately held.

Bapepam chairman Fuad Rahmani confirmed the agency would issue the regulation within the next two or three days.

"Such a regulation is already in the pipeline. I can't reveal the details just yet because it won't be a surprise then," he said.

He added the regulation would also require a tender offer to leave a minimum public share of between 10 and 20 percent.

"If a company wants to go private, they should buy shares through the market where the prices are more competitive. We don't want them to go private through a tender offer, in which case all the shares would be taken off the market," he said.

The current regulation has been widely criticized for creating a lack of liquidity in the stock market because well-performing stocks were often sold off the market very quickly.

"Our job is to develop the market. The existing regulation is not supporting that goal so we're revising it, despite the fact minority shareholders may be disadvantaged by the new rule," Fuad said.

Publicly listed companies for which tender offers have recently been announced include telecommunications company PT Indosat, with an offer from Qatar Telecom; beverage firm PT Ades Waters Indonesia, with an offer from investment firm Sofos of Singapore and Bank UOB Buana, with an offer from United Overseas Bank of Singapore. (anw)

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