An analysis on the legal framework for disclosure in prospectus and the standard of disclosure in determining takeovers and mergers activities post IPO
Initial public offering (IPO) is the maiden issue of shares by a public company. The decision to go public is motivated by several motives and justifications including a motive to pursue a takeover or merger. It is crucial for the investors to predict the possibility of takeovers and mergers after...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
2020
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/79197/ http://irep.iium.edu.my/79197/ http://irep.iium.edu.my/79197/1/809418-IJBS%20-%20Electronic%20Prospectus.pdf |
| Summary: | Initial public offering (IPO) is the maiden issue of shares by a public company. The decision to go public is
motivated by several motives and justifications including a motive to pursue a takeover or merger. It is crucial
for the investors to predict the possibility of takeovers and mergers after IPO, so that they could make an
informed decision in placing their investment. The material and relevant information contained in a prospectus
relating to the IPO company could assist the investors to predict the likelihood of takeovers and mergers post
IPO. Hence, this paper investigates the relevant and material information that are needed by the investors to
predict the likelihood of a takeover or merger post IPO. This paper also analyse the standard of disclosure
required in prospectus for initial public offering in order to determine whether the information compelled for
disclosure can be used by investors to predict the likelihood of takeovers and mergers post IPO. For this
purpose, the laws and regulations on capital market and securities industries as contained in the Capital
Markets and Services Act 2007 and Prospectus Guidelines is analysed. The guidelines for the offering of
electronic prospectus are also discussed in order to shed light on the duties of the host of e-prospectus and the
safeguards for investors. The result of the study shows that the standard of disclosure in prospectus allow the
investors to predict and anticipate the likelihood of takeovers and mergers post initial public offering. |
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