• a) Any reference to the “Capital Market Law” in these Regulations shall mean the Capital Market Law issued by Royal Decree No. M/30 dated 2/6/1424H and any reference to the “Companies Law” in these regulations shall mean the Companies Law issued by Royal Decree No. M/132 dated 1/12/1443H.

• b) Expressions and terms in these Regulations have the meaning which they bear in the Capital Market Law and in the Glossary of defined terms used in the Regulations and Rules of the Capital Market Authority, unless the contrary intention appears.

• a) The purpose of these Regulations is to regulate the following:

  • 1) Acquisitions activities, based on the Authority’s powers as stated in the Capital Market Law; and

  • 2) Merger activities, based on the Authority’s powers as stated in the Companies Law.

• b) The provisions of the Regulations apply to the following:

  • 1) any purchase or sale of shares with voting rights of listed companies, resulting in an ownership or control of a person, individually or collectively by acting in concert, over ten percent (10%) or more of the relevant Offeree Company; or

  • 2) any Offer to purchase shares with voting rights of listed companies, if the percentage of shares sought to be acquired by the Offeror would increase its ownership, individually or collectively by acting in concert, or the shares under their Control, to ten percent (10%) or more of the shares of the relevant Offeree Company, and of that same shares class.

• c) The parties to whom the Regulations apply include:

  • 1) Any person who deals in the Exchange, including (without limitation) issuers, shareholders, authorized persons, and any person involved directly or indirectly in participating or giving an advice on any transaction regulated by these Regulations;

  • 2) directors of companies which are subject to these Regulations; and

  • 3) any person who seek the Acquisition of, or increase its shares in, any company subject to this regulation.

• d) This Regulation shall not contradict the provisions of the Capital Market Law and its implementing regulations.

• e) Any reference to a person or persons in these Regulations applies to private investment fund(s).

• a) Except in private transactions, an Offeror or Offeree Company must appoint their Independent Financial Advisor who shall be approved by the Authority, and an Independent Legal Advisor, who shall be authorized to practice law in Saudi Arabia. The Independent Financial Advisors of the Offeror or Offeree Company shall be the point of contact to coordinate with the Authority on behalf of the party each of them represents, in respect of the potential Acquisition or the potential Merger.

• b) Parties involved in Acquisitions or Mergers must take care that information made available for the purpose of the Acquisition or Merger are not made in a way that may mislead shareholders or the Exchange.

• c) In the case of an Offer, all shareholders of the same type or class of an Offeree Company must be treated equally by an Offeror.

• d) Any document or announcement related to an Offer or potential Offer, addressed by the Offeror, the board of the Offeree Company or their respective advisors, to shareholders, must be true, fair and not misleading.

• e) During the course of an Offer, or when an Offer is in contemplation by the Offeree Company, neither an Offeror, nor the Offeree Company, nor any of their respective advisors may furnish information to some shareholders which is not readily made available to all shareholders. This principle does not apply to the following:

  • 1) the furnishing of information in confidence by the Offeree Company to a bona fide potential Offeror or vice versa in the context of an Offer; or

  • 2) the furnishing of information in confidence by the selling shareholder and/or Offeree Company to an Offeror in the context of a Private Transaction.

• f) An Offeror should only announce an Offer after the most careful consideration in accordance with the provisions of these Regulations, and if it firmly believes that it can and will continue to be able to implement the Offer; responsibility for advising the Offeror and ensuring all reasonably steps are taken in this respect rests on the financial advisor of the Offeror.

• g) In case of a merger or acquisition by an offer to exchange securities against securities that'll be listed in the exchange, the offeror shall comply with relevant provisions stated in the Capital Market Law and its implementing regulation.

• h) In case of an Offer, the Offeror and the board of directors of the Offeree Company must give sufficient information and advice to the shareholders of the Offeree Company to enable them to reach a properly informed decision to accept or reject the offer, and must have sufficient time to do so. No relevant information should be withheld from them.

• i) All persons who have access to confidential information, especially information that are price sensitive, regarding the acquisition or any similar transaction, shall deal with such information in confidential manner, and it shall not be provided to any person unless it's necessary to do so, provided that such person is aware of the importance of confidentiality. Moreover, such persons shall act in manner that eliminates the chances of a leak of the information that are price sensitive.

• j) In case the board of the Offeree Company has reason to believe that a bona fide Offer might be imminent, the board of the Offeree Company may not take any action in relation to the affairs of the company, that may cause the rejection of the offer or preventing shareholders from making a decision on it, without the approval of the shareholders convened in a general assembly

• k) Where there are Related Parties to an Acquisition to which these Regulations apply, there must be full disclosure of the Related Party’s interest in the transaction to the affected shareholders prior to completion of that transaction. Any such transaction must be on arm’s length terms.

• l) The board of an Offeree Company must always act in the best interests of its shareholders.

• m) Directors of the Offeree Company must always, in advising their shareholders, act only in their capacity as directors and not have regard to their personal shareholdings, the shareholdings through Related Parties, the shareholdings of the shareholders they represent in the board, or to their personal relationships with the Offeror or Offeree Company, as applicable, and must at all times have regard to advice given in accordance with Article 18 of these Regulations. It is the shareholders’ interests taken as a whole, together with those of employees and creditors, that should be considered when the directors are giving advice to shareholders. Directors of the Offeree Company should give careful consideration before they enter into any commitment with an Offeror (or anyone else) which would restrict their freedom to advise their shareholders in the future

• n) A shareholder who owns shares with offeror (or Merging Company) and the offeree company (or the merged company) may not vote in shareholders general assembly on decisions related to offers subject to this regulation, except in one of these companies.

• o) A director shall not vote at a meeting of board or of its committees or a general assembly meeting on any resolution concerning an offer subject to these Regulations or any other relevant matter where the director, any relative or representative of his/her has a conflict of interest. In this context such a conflict of interest would arise if:

  • 1) the director has, directly or indirectly, an interest related to the offer or the potential offer.

  • 2) the director is a shareholder in the Offeror and at the same time he/she is a director of the Offeree Company board, or vice versa.

  • 3) the director is a director of the Offeror board and at the same time he/she is a board member of, or a manager in the Offeree Company, or vice versa.

• p) For the purposes of these Regulations, an interest of a person who is a relative or an affiliate of a director shall be treated as an interest of the director.

• q) If a person is intending to enter into an acquisition, which will result in an obligation to extend an Offer to all shareholders, he/she must, before making the Acquisition, ensure that he/she can and will continue to be able, financially and practically, to implement such an Offer

• r) A false market must not be created where the securities value fluctuate, weather of the Offeree Company/merged company, or the Offeror company/Merging Company or of any other company concerned by the Acquisition/Mergers or any other company concerned by the offer in such way that the rise or fall of the prices of the relevant securities becomes artificial and the normal functioning of the market is distorted.

• s) An Offeree Company activities must not be affected longer than reasonable as a consequence of an Acquisition or a Merger.

• a) Any announcement or statement related to a transaction, required under these Regulations, must be complete, clear, accurate and not misleading, and it must comply with the Instructions of announcement issued by the Authority and the provisions of these Regulations.

• b) Parties of an offer or Private Transactions, other than listed companies, that are required to make a public announcement pursuant to these Regulations, and which are not a members in the exchange, may use the Exchange website to make such announcements, or use other Regulatory Information Service Providers.

• a) Notification

  • Where the Competition Law, its Implementing Regulations and other related instructions are applicable on an offer, or where it's required to obtain other local or foreign regulatory approvals or non-objection, the Offeror must state that in its announcement. The Offeree Company and the Offeror must notify and obtain the approval of the General Authority for Competition pursuant to the provisions of the Competition Law

• b) Transaction lapse

  • Where the Competition Law, its Implementing Regulations and other related instructions are applicable on an offer, the transaction will lapse if the General Authority for Competition notifies the Offeror or the Offeree Company in writing, or through any other formal means of notification, that it objects to the transaction.

• c) The end of Offer period

  • 1) When the Offeror or the Offeree Company is notified of the General Authority for Competition objection on the Offer or potential Offer, the Offer period will end, and any new Offer must be announced within 21 days after the General Authority for Competition’s approval of the transaction under the provisions of the Competition Law. In all cases, a new Offer period will be deemed to begin on the date of the General Authority for Competition’s approval of the transaction.

  • 2) If there is no announcement of a new Offer within 21 days after the General Authority for Competition’s approval of the transaction under the provisions of the Competition Law, the Offer period will last until either the expiry of the referred to period, or the announcement by all relevant Offerors (affected by the General Authority for Competition’s approval of the transaction under the provisions of the Competition Law) that they do not intend to make an Offer, whichever is earlier

The Authority reserves the right to waive any person subject to this regulation from applying the provision of these Regulations in whole or in part, upon his/her request or on its own initiative.

• a) Negotiations or discussions between a selling shareholder and an Offeror regarding a Private Transaction must remain strictly confidential and be restricted to a limited number of concerned people within the selling shareholder and Offeror and their immediate advisors (if any).

• b) A selling shareholder and an Offeror who are in negotiation or discussions regarding a Private Transaction must take adequate measures to limit any potential leakage or unlawful usage of confidential/price sensitive information.