[Answer/discuss the question below, or see 2016 bar exam Mercantile Law Instructions; 2016 Mercantile Law Questions: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 14, 15, 16, 17, 18, 19 and 20; See also 2016 Bar Exam: Information, Discussions, Tips, Questions and Results]
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%)