2016 (Mercantile Law) Bar Exam Questions: Question 13

[Answer/discuss the question below, or see 2016 bar exam Mercantile Law Instructions; 2016 Mercantile Law Questions: 123456789101112141516171819 and 20; See also 2016 Bar Exam: Information, Discussions, Tips, Questions and Results]

-XIII-

C Corp. is the direct holder of 10% of the shareholdings in U Corp., a non- listed (not public) firm, which in turn owns 62% of the shareholdings in H Corp., a publicly listed company. The other principal stockholder in H Corp. is C Corp. which owns 18% of its shares. Meanwhile, the majority stocks in U Corp. are owned by B Corp. and V Corp. at 22% and 30%, respectively. B Corp. and V Corp. later sold their respective shares in U Corp. to C Corp., thereby resulting in the increase ofC Corp.’s interest in U Corp., whether direct or indirect, to more than 50%.

[a] Explain the Tender Offer Rule under the Securities Regulation Code. (2.5%)

[b] Does the Tender Offer Rule apply in this case where there has been an indirect acquisition of the shareholdings in H Corp. by C Corp.? Discuss. (2.5%)

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