Takeover Board Confirms Opting Out Practice

Introduction

The Securities and Stock Exchange Act provides for a mandatory offer obligation where a shareholder or a group of shareholders acting in concert exceeds a threshold of 33.3% (or 49% when a company has introduced an opt-up clause) of the voting rights in a listed company listed. According to Article 22 of the act, the shareholders of a listed company can choose to opt out from the mandatory offer obligation by including an opt-out clause in the articles of association, regardless of whether this clause is included before or after listing. However, if the opt-out clause is adopted after listing, its validity is subject to more stringent requirements.

The Takeover Board previously expanded its practice with regard to the evaluation of the validity of opt-out clauses. Pursuant to the act, the introduction of an opt-out clause after listing is valid, provided that it does not prejudice the interests of the shareholders within the meaning of Article 706 of