ACQUISITION/TAKE OVER INDONESIA PUBLIC COMPANY (Pengabilalihan/Akusisi Perusahaan Terbuka)

On 31 May 2011, Head of Capital Market and Financial Institution Supervisory Agency (“Bapepam“) has issued Decree No.KEP-264/BL/2011 on Takeovers of Public Company (“Decree“) including the exhibit, Regulation No.IX.H.1 to amend previous regulation No.IX.H.1 (“Regulation“) which was enacted through Bapepam-LK Decree No.Kep-259/BL/2008.

DEFINITION (Article 1 of the Regulation)

Pursuant Article 1 (a) of the Regulation, Listed Company means the Issuing Company (Issuer/emiten) who has made ​​a Public Offering of Equity Securities or Public Companies.

Pursuant Article 1 (a) of the Regulation, Controlling Public Company is a Party who owns more than 50% (fifty percent) from all shares are fully paid, or the Party that has authority to determine, either directly or indirectly, in any manner the management and/or policy of the Public Company (“Controller“).

Pursuant to Article 1 letter (d) of Regulation, Takeover is an act either directly or indirectly, that change the control of a company. Whereas Article 1(e) of Regulation defines a Mandatory Tender Offer as an offer to purchase the remaining shares of a public company, which shall be made by the new Controller.

Pursuant to Article 1 (b) Organized Groups that are parties to plan, agreement, or the decision to work together to achieve certain goals.

NEGOTIATION IN THE FRAMEWORK OF ACQUISITION/TAKEOVER (Article 2 of the Regulation)

Under its regulation the negotiation in the framework of acquisition/takeover is not obligated to announce, however in the event the candidate of new Controller has intends to announce the acquisition, therefore following requirements shall be comply:

1. Announcement and Notification

    Plan of acquisition and the progress of the transaction shall be deliver to target company, Bapepam & LK, stock exchange where the target company shares was listed and shall be announce in minimum 1 (one) Indonesia dally newspaper, having national. Progress of acquisition shall be announce maximum 2 (two) working days after the progress;

1. Announcement and Notification

   Requirements

    The Announcement and notification shall be completed with following requirements:

1. name of the Target Company and the approximation number of shares will be taking over;
2. Identify of Candidate of Company Controller (address, phone and fax number, type of business sector, purpose of takeover/acquisition);
3. Amount of shares has owned by the Candidate of Company Controller (if any);
4. Plan, consensus, or decision of cooperation between the Organized Groups in relation with public company acquisition/takeover;
5. Method and negotiation process of acquisition/takeover;
6. Material of negotiation;

ACQUISITION/TAKEOVER OF PUBLIC COMPANY;

Candidate of Company Controller Obligations.

In the event of Public Company acquisition/takeover, the Candidate of Company Controller shall complete following requirements:

1. Announcement and notification:

    The Candidate of Company Controller shall announce the acquisition/takeover and shall deliver notification to Bapepam & LK at least 1 (one) days after the acquisition ((i) number of shares has been taking over and the total amount of shares, (ii) Identify of new controller, (iii) statement letter in the event the new controller is the Organized Group (if);

1. Mandatory Tender Offer:

Pursuant to Article 1 (e) of Regulation, Mandatory Tender Offer is an offer to purchase the remaining shares of Public Company (target company) which shall be done by the new controller. After the takeover/acquisition, the new controller shall make a mandatory tender offer to purchase the remaining shares of the Target Company except for following conditions:

1. remaining shares from the shareholders which conducted takeover/acquisition transaction with new controller;
2. shares that owned by other shareholders which have offered by the new controller, with same terms and conditions;
3. other parties that in the same time conducting Mandatory Tender or Voluntary Tender Over upon the same Public Company shares;
4. shares that owned by Principal Shareholders;
5. shares that owned by the other Controller Company in the same Public Company;

Implementation of Mandatory Tender Offer (Article 4 of Regulation)

Requirements Information on Mandatory Tender Offer

The New Public Company Controller that conducting Mandatory Tender Offer in the framework of disclosure information shall stated information as following ((i) number of shares has been taking over and the total amount of shares, (ii) Identify of new controller, (iii) statement letter of Organized Group (if any); (iv) information of Public Company (target company), (v) price of shares and the calculation, (vi) period of Tender offer, (v) settlement method, (vi) mechanism of purchasing; and (vii) explanation regarding the obligations from government through regulations in relation with Mandatory Tender Offer, (viii) list of consultant related with the transaction, (ix) claim in relation with the relevant takeover/acquisition, (x) additional information if necessary.

Procedures of Mandatory Tender Offer:

1. to deliver text disclosure information announcement in the framework of Mandatory Tender Offer and its supporting documents to Bapepam & LK and the Public Company (target company), no later than 2 (two) working days after the takeover announcement);
2. In the event Bapepam & LK request additional information and/or announcement amendment. The New Controller of Public Company shall amend and or adding information that has been announced and re-announce it. The announcement amendment shall be deliver to Bapepam & LK within a period of 5 (five) working days;
3. Announced the disclosure of information in the framework of the Mandatory Tender Offer in a daily newspaper having national circulation no later than 2 (two) working days after receipt of a letter from Bapepam & LK that stating that the new controller to announce the disclosure of information in the framework of the Mandatory Tender Offer;
4. the Mandatory Tender Offer is conduced in the period of 30 (thirty) days starting one day after the announcement;
5. deliver the money/Completed transactions Mandatory Tender Offer, no later than 12 (twelve) days after the bidding period as mention in point 4 above is completed; and
6. deliver Mandatory Tender Offer report to Bapepam & LK no later than 5 (five) working days after the end of settlement transactions referred in point 5 above.

3.    General Meeting of Shareholder (“GMOS”) Approval

In the event the takeover/acquisition is conducted by Public Company, such Candidate of Company Controller is not obligated to granting approval from GMOS, except its provisions is regulated by other prevailing regulation for certain business of Public Company.

4.    Affiliation and Conflict of Interest Transaction

In the event takeover/acquisition transaction is fulfilling in affiliation and conflict of interest transactions, the takeover/acquisition transaction shall comply with Regulation No. IX.E.1.

5.    PURCHASE PRICE

Purchase price of public listed company that taking over from Mandatory Tender Over is calculated pursuant following provisions:

The Shares Listed in Stock Exchange on Trading (Directly)     

in event the takeover/acquisition is conducted directly on the Company’s shares are listed and traded on the Stock Exchange, the lowest share purchase price shall be determinate from the highest following conditions: (i) The average price of the highest daily trading price on the Stock Exchange for 90 (ninety) days before the takeover/acquisition announcement or prior to the announcement of the negotiation (if announces negotiations); or (ii) Acquisition price that has been made. The takeover/acquisition is determined pursuant to the highest price;

The Shares Listed in Stock Exchange Non-Trading – (Directly)

In the event the takeover/acquisition is conducted directly on the Company’s shares listed and traded on the Stock Exchange, however for 90 (ninety) days or more before the takeover/acquisition announcement or prior to the announcement of the negotiations, suspended or not traded in Stock Exchange, the lowest share purchase price shall be determinate from the highest price of following conditions: (i) The average price of the highest daily trading price on the Stock Exchange within 12 (twelve) months counting backwards from the last trading day or trading days suspended; or (ii) Acquisition price that has been made.

Non-Listed Public Company Share’s (Directly)

In the event the takeover/acquisition is conducted directly on the Public Company’s shares non-listed and non-traded on the Stock Exchange, the lowest share purchase price shall be determinate from the highest price of following conditions: (a) purchase price has that has been conducted, and (ii) fair price determinate by the adjuster.

The Shares Listed in Stock Exchange on Trading (Indirect)

in event the takeover/acquisition is conducted indirectly on the Company’s shares are listed and traded on the Stock Exchange, the lowest share purchase price shall be determinate from the highest following conditions: (i) purchase price before the announcement of takeover/acquisition, or (ii) before the announcement of negotiation.

The Shares Listed in Stock Exchange Non-Trading – (Indirectly)

In the event the takeover/acquisition is conducted indirectly on the Company’s shares listed and traded on the Stock Exchange, however for 90 (ninety) days or more before the takeover/acquisition announcement or prior to the announcement of the negotiations, suspended or not traded in Stock Exchange, the lowest share purchase price shall be determinate from the highest price of following conditions: (i) The average price of the highest daily trading price on the Stock Exchange within 12 (twelve) months counting backwards from the last trading day or trading days suspended.

Non-Listed Public Company Share’s (Indirectly)

In the event the takeover/acquisition is conducted indirectly on the Public Company’s shares non-listed and non-traded on the Stock Exchange, the lowest share purchase price shall be determinate from fair price determinate by the adjuster.

In the event the Candidate of Company Controller announce the negotiations and the commencement of the implementation of Mandatory Tender Offer exceeds the limit of 180 (one hundred and eighty) days from the announcement of negotiations, the pricing period of the Mandatory Tender Offer referred to in letter C point 1 (The Shares Listed in Stock Exchange on Trading (Directly) and letter C point 4 (The Shares Listed in Stock Exchange on Trading (Indirect) the period is change

to follow the implementation of the Mandatory Tender Offer.

In the event that the exercise price referred above lower than the exercise price referred to in item 1 letter C ((The Shares Listed in Stock Exchange on Trading (Indirect)) and Letter C point 4 (The Shares Listed in Stock Exchange on Trading (Indirect)) , the price of the Mandatory Tender Offer shall using the exercise price referred to in letter c point 1 (The Shares Listed in Stock Exchange on Trading (Directly)) and Letter C point 4 (The Shares Listed in Stock Exchange on Trading (Indirect))

The Candidate of Company Controller is prohibited to determinate different restrictions and requirements based on classification or position of the Party became the shareholder, except if there are certain distinctions rights or benefits attached to the shares.

OBLIGATION TO TRANSFER SHARES

Article 5

EXCEPTION OF THIS REGULATION

Article 6

CLOSING PROVISION

Article 7

TRANSITIONAL PROVISIONS

Pursuant to Article 2, companies that completed a takeover prior to enactment of the Decree must transfer shares in accordance with the Regulation of the Decree. Item 5 (a) stipulates that certain acquisitions that result in a controlling shareholder having control of 80% of the publicly listed company paid-in capital, is obliged to transfer 20% of the target company to the public, and there must be at least 300 shareholders within 2 years of the tender offer.

AK

 

VOLUNTARY TENDER OFFER (Tender Offer Sukarela)

On 31 May 2011, Head of Capital Market and Financial Institution Supervisory Agency (the “Bapepam“) has issued Decree No. Kep-263/BL/2011 (“Decree“), including the promulgation of this Decree Regulation No. IX.F.I (“Regulation“), this Decree revoked and repealed Decree of the Head of Bapepam Number Kep-04/PM/2002 dated 3 April 2002 concerning the Tender Offer and Decision of the Chairman of Bapepam Number Kep-85/PM/1996 dated 24 January 1996 on Guidelines on Form and Contents of the Tender Offer Statement, and Guidelines on Form and Content of the Target Company Statement and Other Parties In connection with the Tender Offer.

Pursuant to Item 1 (a) (3), a Voluntary Tender Offer is defined as a voluntary offer from a certain party to obtain equity securities through a purchase or securities exchange on mass media. Under Item 2 (a) of the Appendix, a party that is willing to conduct a Voluntary Tender Offer should submit a statement to Bapepam, and copy to the stock exchange where the securities are listed and to the target company.

The statement, pursuant to Item 2 (b) should consists of, for instance, the name and address of the targeted company; the calculation of the equity securities; information on the relationship, contracts, and material transactions between the party and the target company (as elaborated on in item 3); and so forth. Additionally, Item 2 (c) states that the statement should be published in at least two Indonesian daily newspapers, where it is mandatory that one of the newspapers is circulated on a national level. After the publication, the offer cannot be annulled, unless Bapepam approves the annulment.

Voluntary Tender Offer Statement become effective when Bapepam has issue effective statement, and there is no change and/or additional information is required or in the event the limitation period has been lapse (i) 15 (fifteen) days from the date of the Voluntary Tender Offer Statement completed application received by Bapepam, and have fulfill all the requirements set out in this Decree, (ii) 15 (fifteen) days from the date of last change presented the party that conducted Voluntary Tender Offer or requested by Bapepam completed or pursuant to effective statement from Bapepam and there is no requirement needed. In the event there are any additional or correction information, the applicant shall announce it maximum 1 (one) day after the effective statement from Bapepam.

STATEMENT FROM TARGET COMPANY AND OTHER PARTIES

Target company, affiliation from target company or other applicant that intends to conduct Voluntary Tender Offer upon the same equity or other parties intends to deliver information of opinion regarding the Voluntary Tender Offer shall made in the form of written statement completed with evidences that support such objection.

In the event the directors or commissioners of the target company know or have reasonable reason that the information contained in the tender statement was incorrect or misleading, therefore the target company is obligated to made written statement to disclaim such information.

Pursuant to Article 5 of the Regulation, the Voluntary Tender Offer should start two days after the offer is effective. The offer will be held for 30 (thirty) days, pursuant to Article 5 (b), and could be extended for period 90 (ninety) days with approval from Bapepam. The result of the offer should be reported to Bapepam, no later than 10 (ten) days after the offer ends (Item 6 (a)).

SECURITIES PRICE

1. Voluntary Tender Offer in the form of shares and/or warrants, the price of the Voluntary Tender Offers for shares and/or warrants unless otherwise determined by the Bapepam, should be higher than the price of the following:
   
   1. the highest price of the earlier Voluntary Tender Offer filed by the same party within 180 (one hundred eighty) days before the announcement referred to in item 2 letter c;
      
   2. the average price of the highest daily trading price on the Stock Exchange within 90 (ninety) days prior to the announcement as referred to in item 2 letter c, in terms of the Voluntary Tender Offer made on the shares and/or warrants of the target company are listed and traded on stock exchange;
      
   3. the average price of the highest prices in the daily trading on the Stock Exchange within 12 (twelve) months counting backwards from the last trading day for such shares,, in event of stock and/or warrants of the target company are not traded on the stock exchange within 90 (ninety) days prior to the announcement as referred to in item 2 letter c; or
      
   4. reasonable price set by the Assessors, in terms of the Voluntary Tender Offer made on the shares and / or warrants of the target company are not listed on the stock exchange.
      
2. In the event the Voluntary Tender Offer is in the form of convertible bond, the price should be higher than price of the shares that have been determinate at the time of publication.
   
3. Party that conducting Voluntary Tender Offer may make change the price, as long as the amend price were not lower than the price that has been announced or lower than price that has been announced.
   
4. Changes of price as referred to in letter c may only be conducted prior to the effectiveness of the Voluntary Tender Offer Statement.
   

IMPLEMENTATION OF VOLUNTARY TENDER OFFER

1. The Voluntary Tender Offer shall begin no later than 2 (two) working days after the Voluntary Tender Offer Statement becomes effective;
   
2. Minimum Voluntary Tender Offer Period is 30 (thirty) days and can be extended to a maximum of 90 (ninety) days, unless otherwise agreed by the Head of Bapepam;
   
3. Tender transaction shall be completed no later than 12 (twelve) days after the bidding. (the money and the securities has been delivered);
   
4. In the event the requirements as set forth in this Regulation are not completed, then the securities shall be returned no later than 12 (twelve) days after the Voluntary Tender Offer period has been expired;
   
5. In the event the Tender Offer is canceled, the securities shall be returned no later than 12 (twelve) days after the cancellation dated;
   
6. In the event the Voluntary Tender Offer is conducted through exchange of securities from the target company, the Applicant shall provide option for another securities or cash in the amount as stipulated in item 4 letter a or the number 4 point b of Decree.
   
7. Considering the limitation period of Voluntary Tender Offer are set out in letter b, any future extension of the Voluntary Tender Offer shall be at least 15 (fifteen) days and published within 2 (two) days before the renewal period begins. The Announcement shall be posted within 2 (two) Indonesian daily newspapers and one of such newspaper has a national circulation and lists the number of securities tendered have been accepted up to the renewal period begins.
   

   In the event the number of equity shares offered for sale or exchange exceeds the number of equity securities set forth in the Voluntary Tender Offer, the Party that conducted the Voluntary Tender Offer shall make portion in proportion comparable with the participation of each Party which makes sales in the Voluntary Tender Offer by attention to the prevailing trading unit on the Stock Exchange without fractions.
   

8. The Applicant shall appoint an accountant to conduct a special examination of the fairness of the implementation of allotment and shall submit its report to Bapepam within 30 (thirty) working days from the date of allotment expires.
   
9. Parties who intends sell the equity securities in connection with the Voluntary Tender Offer shall submit such Securities to the Custodian designated by the party that conducted the Voluntary Tender Offer and may withdraw such securities at any time prior to the Voluntary Tender Offer expires.
   
10. With regard to the provisions stipulated in the letter b, changes in the Voluntary Tender Offer requirements can only be done no later than 15 (fifteen) days prior to the Voluntary Tender Offer expires. Such changes must be announced within 2 (two) Indonesian language daily newspapers, one of which has nation circulation and delivered to the parties as referred to in item 2 letter (a) at the same time with the announcement.
    
11. Person making the Tender Offer are prohibited from buying or selling equity securities that are offered within 15 (fifteen) days before the announcement as referred to in item 2 letter c up to the Voluntary Tender Offer expires.
    
12. Voluntary Tender Offer Form may be distributed after the Voluntary Tender Offer Statement effective. Voluntary Tender Offer Form must contain a statement that the party offering of Equity Securities have received and read the Voluntary Tender Offer Statement.
    
13. In the Voluntary Tender Offer, party that conducted the Voluntary Tender Offer to make an announcement re Voluntary Tender Offer Statement to be submitted to Bapepam. Target Company are prohibited from conducting transactions undertaken solely for the purpose of blocking a change of control of Target Company is as a result of the implementation of the Voluntary Tender Offer in the period from the announcement as referred to in item 2 letter c up to the Voluntary Tender Offer expires.
    
14. Party that conducted Voluntary Tender Offer and its Affiliates shall keep confidential the plan before the announcement of the Voluntary Tender Offer referred to in item 2 letter c.
    
15. Person making the Tender Offer Voluntary forbidden to set different restrictions and requirements based on classification or position of a party who becomes the holder of Equity Securities, except if there are differences in the rights or benefits attached to the Equity Securities in question.
    
16. Party that conducted Voluntary Tender Offer to make plans about the continuity or change in company management and employees after the Voluntary Tender Offer, as long as it is not a requirement of the Voluntary Tender Offer, and disclosed in the Voluntary Tender Offer Statement.
    

CLOSING PROVISIONS

The applicant shall report the Voluntary Tender Offer results to Bapepam at least 10 (ten) working days from the date of Voluntary Tender Offer completion dated and the evidence of announcement shall be submitted to Bapepam no later than 2 (two) working days after the announcement was published in the newspaper. Without prejudice to the criminal provisions of the Capital Market, Bapepam authority to impose sanctions against any violation of this rule, including the Party that caused the violation.

AK