Table below provides for the circumstances where tender offer regulations applicable to a public joint stock company (the target company) will be triggered under the Securities Law 2006 and the Securities Law 2019 (see further discussion here):

	Securities Law 2006	Securities Law 2019
Circumstance 1	An offer to purchase voting shares which results in the ownership of 25% or more of the outstanding voting shares of the target company (25% Acquisition).	Any investor and its related persons (except in case the investor and its related persons are investment funds and fund management companies) intend to purchase voting shares which results in the direct or indirect ownership of 25% or more of the total outstanding voting shares of the target company.
Circumstance 2	Any investor and its related persons holding 25% or more of the voting shares in the target company wishing to purchase a further 10% or more of the outstanding voting shares in the target company.	Any investor and its related persons (except in case the investor and its related persons are investment funds and fund management companies) holding 25% or more of the voting shares in a target company intend to purchase additional voting shares which results in the direct or indirect ownership reaching or exceeding 35%, 45%, 55%, 65%, 75% of the total outstanding voting shares of the target company.
Circumstance 3	Any investor and its related persons holding 25% or more of the voting shares in the target company wishing to purchase a further 5% to less than 10% of the outstanding voting shares in the target company within one year from the completion of the previous tender offer.	Not applicable.

The new Securities Law 2019 has adopted numerous significant changes in comparison with the Securities Law 2006. These include:

· All the circumstances subject to tender offer requirements now cover both the person acquiring the shares and its related persons. Under the Securities Law 2006, it is not clear if Circumstance 1 will cover the investor’s related persons. However, the Securities Law 2016 expressly exclude an investment fund and the fund management company managing such fund from the scope of related persons subject to tender offer requirements.

· Under the Securities Law 2019, the tender offer requirements will be triggered when there is an “intention” to acquire voting shares in the target company. Under the Securities Law 2006, it is arguable that the tender offer requirements will be triggered only when there is an actual offer or purchase of shares.

· Under the Securities Law 2019, the tender offer requirements will apply to even “indirect ownership” of the shares in the target company. While the meaning of indirect ownership needs to be clarified, this provision suggests that an acquisition of shares of a holding company controlling the target company could also be subject to tender offer requirements. However, the Securities Law 2019 does not differentiate the person subject to tender offer requirements from the persons subject to the calculation of the shareholding for assessment of the applicability of tender offer requirements. The former should be only one person (being either an individual or an organisation) and the latter should be such person and its related persons.

· The Securities Law 2019 makes it clearer to determine when tender offer requirements will apply after an investor owns 25% or more voting shares in a target company by setting up fixed subsequent thresholds (35%, 45%, 55%, 65%, and 75%). Under the Securities Law 2006, it is quite difficult to determine when tender offer requirements will apply after an investor owns 25% or more voting shares in a target company.

On the other hand, the Securities Law 2019 still does not provide for a squeeze-out mechanics (see earlier discussion here) and does not apply to the case of proxy solicitation. This post is written by Tran Thuy Tien and Le Thanh Nhat and edited by Nguyen Quang Vu.

Vietnam Business Law